PSALM pushes plan to sell assets worth P45 billion

MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (PSALM) is eyeing to kickstart by yearend the privatization process for the 796.46-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant complex in Laguna, which is part of the P45-billion worth of key remaining assets that the state-owned corporation has yet to privatize.

“For CBK, we hope to release the invitation to bid by December of this year. Hopefully, we’ll have a bidding six months after, targeted to be around June to July 2024 for the bidding, and hopefully a successful closing also six months thereafter by December 2024,” PSALM president and CEO Dennis dela Serna said.

PSALM conducted in May a successful public bidding for the 165-MW Casecnan hydroelectric power plant, in which Fresh River Lakes Corp., a subsidiary of the Lopez Group’s First Gen Corp., emerged as the highest bidder.

“For Casecnan, we hope to close and receive the privatization proceeds by December 2023,” Dela Serna said.

Aside from the CBK, Dela Serna said remaining assets to be privatized and disposed by PSALM include the 200-MW Mindanao coal-fired power plant, 72 hectares of real estate assets in Bagac, Diliman, Sucat and Baguio, as well as land underlying independent power producer (IPP) plants.

Dela Serna said the estimated value of PSALM’s key remaining assets is about P45 billion.

“Our specific plans for Mindanao coal is to go through what they call energy transition mechanism wherein we’re studying with our consultants, in this case the ADB, is for the early termination or close of that power plant from 2031 to sometime earlier,” he said.

Meanwhile, PSALM plans to enter into a rehabilitation project for the Agus and Pulangi hydroelectric power plants, which Dela Serna said were in dire need of rehabilitation.

“For Agus-Pulangi, we are focusing on the rehabilitation and possibly an O&M (operations and maintenance) agreement,” Dela Serna said.

“The concession plan is to start hopefully the bidding process in 2024 so that we could have implementation of the rehabilitation by 2026,” he said.

PSALM is the agency mandated by the EPIRA to handle the financial obligations of the National Power Corp. (Napocor) through the privatization of government-owned assets, collection of the proceeds and its effective implementation of its liability management program.

PSALM has so far privatized 45 generation assets equivalent to 9,026.68 MW, achieving 82 percent privatization level.

A total of 1,761 real estate lots equivalent to 1,060 hectares have likewise been sold.

PSALM is also seeking the extension of its corporate life from the expiration of its original term in June 2026 subject to the certain conditions, such as the completion of privatization of generation assets and IPP contracts within June 2026.

“We hope to extend the corporate life of PSALM beyond its original term of June 2026 as we hope to privatize the remaining power plants of Napocor-PSALM and the remaining real estate of PSALM. We also hope to liquidate certain financial obligations at least within the corporate extension and collect certain receivables from certain electric cooperatives, IPPA contracts, or IPP contracts,” Dela Serna said.

“We would like to recommend that the PSALM corporate life is extended for another 30 years subject to those conditions in the fulfillment of PSALM’s mandate to privatize the generation assets, efficiently manage the financial liabilities, and administer the universal charge,” he said.