STATE-LED Power Sector Assets and Liabilities Management Corp. (PSALM) is targeting to complete next year the privatization structure for two power plants through the consultancy assistance of the Asian Development Bank (ABD), its president said.
“Hopefully by next year, we will be able to decide on the privatization structure,” PSALM President and Chief Executive Officer Irene Joy B. Garcia told reporters about the remaining facilities under the company, which was created by law to sell government energy assets.
She identified these as Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plants, and the Casecnan multi-purpose project.
“The power plants, they have different structures. We are seeking the assistance of ADB to look at the technicalities of that,” she said, adding CBK will be privatized first.
Ms. Garcia said the need to first come up with a privatization structure through a study by the ADB is because of Casecnan’s ownership structure.
She said government agencies National Irrigation Administration (NIA) and National Power Corp. (Napocor) have an agreement to transfer the latter’s 60% stake in the project to PSALM as called for under Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA) of 2001.
“Obviously, we need to carve out that 60%. So how do you carve it out? How do you divide the assets? Is it going to be an identification of what are the irrigation assets and what are the power assets?” she said.
She said the agreement between NIA and Napocor does not provide implementing provisions how to divide the 60-40.
Based PSALM’s website, Casecnan is contracted to CE Casecnan Water and Energy Co., Inc. as its independent power producer administrator (IPPA) until April 5, 2022. IPPAs are qualified private sector entities that manage the output from the contracts that Napocor entered into with the independent power producers.
For CBK, Ms. Garcia said ideally the agency wants a single buyer for the power plants. CBK is operated by CBK Power Co. under an IPPA contract until Feb. 7, 2026. IPPAs are appointed through public biddings conducted by PSALM. They gain an opportunity to trade in the wholesale electricity spot market without the expense of building a new plant.
“We are fine-tuning the scope of the coverage of the study of ADB, so that by next year they can start the study,” she said. “I’m not very certain how much time they need, but I’m thinking [that’s about] six months before they come up with the study.” — Victor V. Saulon
