PSALM aims to privatize hydro plants under IPP contracts in 2021


The government, through the Power Sector Assets and Liabilities Management Corporation (PSALM), looks to privatize its hydroelectric power plants (HEPPs) under Independent Power Producer (IPP) contracts this year, with a study by the Asian Development Bank (ADB) nearing completion.

PSALM President and CEO Irene Garcia said that the ADB is expecting to finish its study on the privatization options for the Caliraya-Botocan-Kalayaan (CBK) and the Casecnan HEPPs within the month. The state-run company tapped the ADB last year for the said study.

The Department of Energy (DOE), in its 37th Electric Power Industry Reform Act (EPIRA) Implementation Status Report, said the privatization process for the CBK and Casecnan HEPPs would begin this year.

CBK Power Co. Ltd. handles the CBK-HEPP’s IPP administrator (IPPA) contract valid until February 7, 2026. The hydro plant has a capacity of 797.92 megawatts.

CE Casecnan Water and Energy Company Inc., meanwhile, handles the Casecnan plant with an IPPA contract valid until April 5, 2022. The plant’s contracted energy listed at 228 gigawatt-hours.

According to the DOE, the ADB hired a technical consultant despite the declaration of the enhanced community quarantine brought about by the COVID-19 pandemic. The report did not disclose the technical consultant’s identity, but the study began in July last year.

Back in 2019, PSALM finalized the study’s scope, which included setting the minimum bid price and the timeline of the study.

Chronologically, the state-run firm said it was eyeing to privatize CBK-HEPP first before Casecnan HEPP, which has a more complicated ownership structure.

PSALM, through the National Power Corporation (NAPOCOR), owns only 60% of Casecnan, while the National Irrigation Administration (NIA) owns the remaining 40%. Garcia had said the NAPOCOR-NIA agreement does not have implementing provisions on exactly how to divide the 60-40 ownership upon privatization.


Photo of CBK HEPP from CBK Power Co. Ltd. website.