PSALM reviews buyout of CBK

by Alena Mae S. Flores – January 18, 2016 at 11:30 pm

from Manila Standard

Power Sector Assets and Liabilities Management Corp. is studying the legality of buying out the independent power producer contract of the 728-megawatt Caliraya-Botocan-Kalayaan hydro power plants and the 140-MW Casecnan multi-purpose project so it can proceed with their privatization.

“It’s only an option by government. Note that this is still under study. Buy out of the IPP contract by the government,” PSALM president Lourdes Alzona told reporters.

Alzona said PSALM would conduct a new study on the disposal of the two power plants.

The government earlier announced plans to privatize CBK and Casenan hydro power plants by offering the contracted capacities to the IPP administrator.

“For the IPPs, CBK and Casecnan, the plan is to have another study aside from the privatization. We have to get opinion if the other options are possible like buy-out. If it is okay on the legal side, we will consider buyout, then it will be sale of asset,” Alzona said.

Alzona said cited a buyout provision in the IPP contract and a specific date on the privatization of the assets.

“But as per discussion with DoF [Finance Department] and Malacañang, we have to study the legal side if it can be allowed because under EPIRA [Electric Power Industry Reform Act of 2001], we have to privatize,” Alzona said.

“If we buy out the IPP plants that are with us, then we can privatize it. But we have to check the legality. That’s why it’s still hanging [as] to what type of privatization we will conduct but it’s scheduled for privatization until 2017 [yet],” she said.

The CBK hydro facility consists of the 22.6-megawatt Caliraya in Lumban, 20.8-MW Botocan in Majayjay and the 684.6-MW Kalayaan I and II in Kalayaan, Laguna. J-Power and Sumitomo Corp. of Japan operate the CBK power plants.

The 150-MW Casecnan project, meanwhile, was built following the signing of a build-operate-transfer contract between the National Irrigation Administration and California Energy Casecnan Water and Energy Company Inc. in 1994.

CE Casecnan’s contract with the government will lapse on April 5, 2022 while that of J-POWER will end on February 7, 2026.