DOF commends successful privatization of Casecnan Hydroelectric Power Plant

The Department of Finance (DOF) commended the Power Sector Assets and Liabilities Management Corporation (PSALM)’s successful competitive bidding process for the sale of the 165-megawatt Casecnan Hydroelectric Power Plant (CHEPP) in Pantabangan, Nueva Ecija.

“The privatization of the Casecnan Hydroelectric Power Plant will ensure that the sector remains competitive so as to reduce prices and increase efficiency,” Finance Secretary Benjamin E. Diokno said.

Secretary Diokno currently sits as the Chair of PSALM’s Board of Directors.

PSALM received the highest bid from Fresh River Lakes Corp. amounting to USD526 million (approximately PhP29.6 billion) on May 16, 2023.

The winning bid from Fresh River Lakes Corp. surpassed the minimum bid price of USD227,272,727.28 (approximately PhP12.8 billion), which was set by the PSALM Board based on an enterprise valuation of the CHEPP by an independent third-party financial advisory firm .

Other notable bids were submitted by the consortium of EEI Power Corporation, Soosan ENS Co. Ltd., Soosan Industries Co., Ltd, and Mapalad Power Corporation amounting to USD298,899,999 (approximately PhP16.8 billion) and Neptune Hydro Inc. amounting to USD258 million (approximately PhP14.5 billion).

Eight (8) bidders were initially qualified to participate in the bid opening and preliminary evaluation process.

“The proceeds from the sale of CHEPP will be used to liquidate the outstanding financial obligations that PSALM had assumed from the National Power Corporation (NPC) to settle government debt,” Secretary Diokno said.

The bid submitted by Fresh River Lakes Corp. will undergo a rigorous post-qualification process to verify the accuracy and authenticity of the eligibility documents submitted.

CHEPP is a run-of-the-river type of power facility with limited impounding that was transferred to the government following the conclusion of the Build-Operate-Transfer (BOT) agreement between the California Energy Casecnan Water and Energy Co. Inc. (CECWEC) and the National Irrigation Administration (NIA) on December 11, 2021.

The ownership of the plant is shared by PSALM and NIA on a 60 percent and 40 percent arrangement, respectively.

The DOF is committed to promoting greater private sector participation by strategically using public-private partnerships (PPP) to support the administration’s infrastructure program.

“By leveraging private capital and expertise, PPPs will help speed up investments and uphold quality infrastructure development. This will support efforts to keep our infrastructure spending at 5 to 6 percent of GDP without constricting fiscal space,” Secretary Diokno added.