SNAP eyeing to join bidding for CBK plant

Published December 23, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/12/23/snap-eyeing-to-join-bidding-for-cbk-plant/

Joint venture firm SN Aboitiz Power, Inc. (SNAP) is keenly looking to participate in the targeted auction of the 728-megawatt Caliraya-Botocan-Kalayaan (CBK) hydropower plant once the government decides on its privatization next year.

“We are very interested. We think we’re very well positioned to acquire that asset and to optimize it. It’s a very good fit to the portfolio that we have today,” SNAP President and CEO Joseph S. Yu said.

Asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM) just hinted to media recently that the CBK plant shall be placed at the auction block prospectively by the second half of next year.

That will be following the targeted completion of an Asian Development Bank (ADB) study that will then determine the “divestment structure” for the hydropower plant.

The CBK hydropower complex is one of the major assets being lined up for privatization next year or year 2021 – together with the 150MW Casecnan hydropower facility of which build-operate-transfer (BOT) contract will lapse in year 2021.

In the case of SNAP, it has been the company that cornered most of the hydropower assets privatized by PSALM in the past – including the Ambuklao-Binga and Magat hydropower plants in Luzon.

The company, which is a joint venture of Norwegian firm SN Power and Aboitiz Power Corporation, has also pursued rehabilitation and reinforcement of its acquired hydropower assets – hence, increasing their generation outputs which proved very critical especially during the tight supply conditions in Luzon grid in the past several years.

There had been drought in privatization efforts of PSALM in recent years, thus, investors are eagerly awaiting what comes next in their line up of asset divestments.

The hydro plants, including the big-ticket Agus and Pulangui hydropower complex in Mindanao, are among the most-awaited divestment developments that investors have been keeping track of in the past 4-5 years.

Nevertheless, it has been decided by the government that the privatization of the Agus plant has to be deferred until such time that its rehabilitation has already been completed.

That will also set leverage for the State to take the pulse of Mindanao consumers first as to their take on the divestment of the Agus-Pulungui hydropower facilities, given that such had always been a contentious concern for them in the past years.

PSALM in particular will need to continue with its asset-divestments function as it still badly needs to raise funds that it can utilize to settle the remaining mammoth power sector debts.