State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is targeting a successful divestment of the 165-megawatt Casecnan hydropower plant once it is placed for bidding by March 28 this year.
The company announced that the second and third pre-bid conferences for the plant’s privatization had already been concluded – and so far, those served “as convenient venues for the interested bidders to inquire and clarify on the terms and conditions of the sale.”
As noted by PSALM President and CEO Dennis Edward A. Dela Serna “we envision that the sale of the Casecnan plant will be successful, efficient and judicious for PSALM and the winning bidder who will take over its management.”
The company similarly indicated that it was able to sustain the interest of at least 14 firms that are interested to own the asset – and these have been: Axia Power Holdings Philippines Corp.; Belgrove Power Corporation; the joint venture of EEI Power Corporation, Soosan ENS Co. Ltd.. and Soosan Industries Co. Ltd.; Fresh River Lakes Corp.; GigaAce 11, Inc; Global Hydro Power Corporation; Hansan Solar Corporation; Neptune Hydro, Inc.; Panasia Energy, Inc.; Pan Pacific Renewable Power Phils. Corp.; Peakpoint, Inc.; San Roque Power Corporation; Semirara Mining & Power Corporation; and Sta. Clara International Corp.
This will be the first power plant divestment that will be carried out by PSALM under the Marcos administration – and that will be a continuation of the privatization exercise of the state-owned power assets that were previously under the control and management of government-owned National Power Corporation.
The Casecnan plant, which is a ‘run-of-river’ type of power facility with limited impounding area, is sited in Pantabangan, Nueva Ecija. The asset was turned over to PSALM in December 2021, following the lapse of its build-operate-transfer (BOT) arrangement with its then-contractor American firm CalEnergy International.
During the second pre-bid process, PSALM conveyed that the main concern raised by the interested bidders had been the prospective return on investment that the buyer would be able to fetch from such asset acquisition.
So far, according to Dela Serna, that part of the pre-bid undertaking “paves the way for a good return on investment for the winning bidder, starting with a more market-responsive price and on an ‘as-is, where-is’ and ‘cash’ basis sale for the Casecnan plant.”
The asset-seller firm emphasized that “the two conferences enlightened bidders of their lingering queries on the bidding process and the potential concerns attendant to managing the Casecnan plant.”
The other key issues raised touched on: tax laws and regulations that could impact the successor-company; the role of the winning bidder to lead the crafting of the special use agreement in protected areas (SAPA) with the Department of Environment and Natural Resources (DENR); as well as water permits for power generation and irrigation.
Also discussed as major concerns were “other permits currently enforced or to be secured by the winning bidder; and the observance of indigenous peoples (IP) rights when the new owner takes over the management of the plant, and safety considerations prior to inspecting the plant.”
Before the scheduled auction, it is expected that the board of directors of PSALM will be drawing the minimum reserve price that shall be enforced for the privatization of the Casecnan plant. ###