State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is expected to receive up to $526 million by the end of the year from Fresh River Lakes Corporation following the acquisition of the 165-megawatt Casecnan hydroelectric power plant (CHEPP) in Nueva Ecija.
PSALM President and CEO Dennis Edward A. Dela Serna have set December 2023 as the goal for the completion of financial arrangements and the transfer of ownership of the privatized Casecnan power facility.
The Casecnan proceeds will aid PSALM in meeting its maturing US dollar obligations next year, which is the main reason behind their preference for US dollar payment instead of Philippine peso, PSALM President and CEO Dennis Edward A. Dela Serna explained in a report by Manila Bulletin.
As stated in the documents, PSALM’s upcoming US dollar obligations, amounting to $385.087 million (around P21.611 billion) due next year, will be paid to Mizuho Bank, Mitsubishi UFJ Financial Group (MUFG), Land Bank of the Philippines (LBP), and the Development Bank of the Philippines.
Dela Serna mentioned that the post-qualification process for the asset’s bidding, which yielded positive results on May 16, will be finalized this week. Following this, it will be presented to the PSALM board for final assessment and approval before issuing the notice of award to the winning bidder.
Energy Secretary Raphael P.M. Lotilla praised the successful privatization of the power plant as a significant milestone in strengthening energy security, highlighting the private sector’s contribution of efficiency and capital for a reliable and resilient energy sector in the country’s future.
The successful bidder, a subsidiary of Lopez-led First Gen Corp., has presented a price tender that surpasses the PSALM Board-approved reserve price of $227.272 million.
The DOE emphasized that Fresh River Lakes will undergo a thorough post-qualification procedure to validate the accuracy and authenticity of the eligibility documents provided.
The award and transfer of the asset to the winning bidder will be authorized by the PSALM Board, chaired by the Department of Finance (DOF), with the Department of Energy (DOE) serving as the vice chairman. Other board members include representatives from PSALM, the Department of Trade and Industry, the Department of Justice, and the National Economic Development Authority.