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Manila Bulletin devider Business devider PSALM cancels IPPA bidding for CBK hydro complex, eyes direct sale after contract expiration

PSALM cancels IPPA bidding for CBK hydro complex, eyes direct sale after contract expiration

Published Feb 5, 2025 12:22 am

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has formally notified qualified bidders this week that it canceled the independent power producer administrator (IPPA) privatization mode for the 796-megawatt Caliraya-Botocan-Kalayaan (CBK) hydropower complex in Laguna.

An industry insider divulged that the divestment frame is targeted to be replaced with an outright sale once the asset’s build-rehabilitate-operate and transfer (BROT) contract lapses next year.

The source primarily indicated that “the information we’re getting is that PSALM will conduct another bid, but instead of IPPA plus asset sale, they will go directly to asset sale due to expiring IPP contract by February 2026.”

Separately, PSALM President and CEO Dennis Dela Serna confirmed the scrapping of the IPPA package, emphasizing that “we’ve issued to cancel the CBK privatization and its eventual rebidding.”

PSALM was originally slated to privatize the CBK asset last year; then, it moved to April 2025, and after further contemplation, it eventually backpedaled on the preliminary divestment plan.

Under an IPPA arrangement, the remaining contract will be auctioned to qualified private sector players; and the winning bidder will be the one to trade CBK’s generated capacity to the Wholesale Electricity Spot Market (WESM) or sell it to off-takers (buyers).

The private energy firms that initially eyed to corner the hydropower facility included Giga Ace 11 of Ayala group’s ACEN Corp.; First Gen Prime Energy Corp of the Lopez group; Semirara Mining and Power Corp of the Consunji group, as well as foreign firms Marubeni Corp. and Korea Water Resources Corp.

As this developed, the Congressional bicameral conference committee chaired by Congressman Lord Allan Velasco and Senator Mark Villar has also passed the bill extending the life of PSALM for another 10 years, following the lapse of its initial 25-year corporate existence accorded under the Electric Power Industry Reform Act.

“PSALM shall continue to exist for a period of 10 years from the expiration of its original term on June 26, 2026,” the proposed law stipulated.

The legislative measure further stated that “all assets held by it, all moneys and properties belonging to it and all its facilities outstanding upon the expiration of its term of existence shall revert to and be assumed by the national government.”

It was similarly specified that PSALM “shall be prohibited from collecting or charging consumers for stranded costs and stranded debts during its extended corporate life.”

Apart from CBK hydro, the other remaining assets yet to be privatized by PSALM would be the power purchase contact of the Mindanao coal plant, the Agus-Pulangui hydropower complex, which is also in the Mindanao grid; as well as the universe of real estate assets of its precursor-company National Power Corporation.

Following this milestone in the legislative maze, Dela Serna asserted that he is elated over “the bicam’s passage of PSALM’s corporate life extension,” primarily the support of the bill’s sponsors in the two chambers of Congress.

Related Tags

aliraya-Botocan-Kalayaan (CBK) Power Sector Assets and Liabilities Management Corp. Caliraya
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