Closing of Angat hydro plant sale nears

03 Sep 2013

The Power Sector Assets and Liabilities Management (PSALM) Corporation looks to close soon the sale of the 218-megawatt (MW) Angat Hydro Electric Power Plant (HEPP) after it issued the Certificate of Effectivity (CoE) of the Asset Purchase Agreement (APA) to winning bidder Korea Water Resources Development Corp. (K-Water).

In simple ceremonies held on Monday, 02 September 2013, PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr. handed over to K-Water Vice President Byung Hoon Yune the CoE.

"The turnover of the CoE sets in motion the final closing of the sale," Mr. Ledesma noted in his message.

Pursuant to the APA, the CoE obliges K-Water to fully comply and complete all conditions precedent for the closing of the Angat HEPP sale. This includes the delivery of the performance bond worth USD8.82 million (USD8,817,600.00), which K-Water should settle within 10 days from contract effectivity or not later than 12 September 2013.

After K-Water's acknowledgment of receipt of the CoE, PSALM explained that the APA and the Operation and Maintenance Agreement for the non-power components of the Bulacan-based hydropower plant have become effective.

"We would like to thank all of you for taking time to celebrate with us this important milestone in the sale of the Angat HEPP. We hope that you continue to support us as we work towards the final closing of the sale," Mr. Ledesma said.

Mr. Yune, upon his acceptance of the certificate, said that "the issuance of the CoE will cement the partnership of K-Water with the Philippine Government in service of the Filipino people."

Guided by his company's pledge to practice ethical and transparent management, Mr. Yune said "K-Water is confident we will be able to build the trust of the Filipino people as we operate the Angat hydropower plant in the coming years."

Mr. Yune likewise assured that K-Water will do its role in preserving the Angat Dam a vital water resource. "We hope that as K-Water assists the Philippines in its thrust towards water security, we will be able to pass on our technological capability to Filipino engineers and scientists as well."

PSALM said that the event was also made more meaningful with the presence of His Excellency Hyuk Lee, Ambassador to the Philippines of the Republic of Korea, who also witnessed the handover ceremony. Representatives from other concerned agencies also graced the event, which include the Department of Finance, National Power Corporation, National Irrigation Administration, Metropolitan Waterworks and Sewerage System (MWSS), and the local government of Norzagaray, Bulacan.

While PSALM had successfully conducted the bidding for the Angat HEPP last 28 April 2010, the Supreme Court (SC) halted the asset sale on 24 May 2010 through a status quo ante order after a complaint filed by petitioners Initiatives for Dialogue and Empowerment Through Alternative Legal Services (IDEALS), Inc., et al questioned the legality of PSALM's conduct of the bidding for the Angat HEPP.

However, on 09 October 2012, the SC upheld the legality and validity of the conduct of the said bidding process and the subsequent issuance of a Notice of Award to K-Water. Despite a Motion for Partial Reconsideration lodged by IDEALS Inc. on the decision, the SC en banc upheld its decision and resolved to deny the said motion "with finality" on 13 November 2012.

K-Water's winning bid for the Angat HEPP of USD440.88 million (USD440,880,000) bested five (5) other bidders who participated in the exercise, namely: First Gen Northern Energy Corp. (USD365 million); San Miguel Corp. (USD312.50 million); SN-Aboitiz Power Pangasinan, Inc. (USD256 million); Trans-Asia Oil & Energy Development Corp. (USD237 million); and DMCI Power Corp. (USD188.89 million). K-Water's bid exceeded the reserve price set by the PSALM Board for the Angat HEPP.

Located in San Lorenzo, Norzagaray in Bulacan, the Angat HEPP consists of four main units, each with a 50-MW capacity. The units were commissioned between 1967 and 1968. To augment its operation, the plant uses five (5) auxiliary units with a total capacity of 46 MW. The 18-MW Auxiliary Units 1, 2 & 3 are part of the sale, while the 28-MW Auxiliary Units 4 & 5, which are owned by MWSS, were not part of the bidding.

PSALM reiterated its statement that only the power plant component of the Angat Dam was privatized, and that the privatization of the Angat HEPP will not affect the water supply from the Angat reservoir. The Angat Dam, which supplies more than 90% of the water requirements of Metro Manila and neighboring provinces, remains the property of the Philippine government.

Strategic Communications and Partnership Division
Tel. No. (632) 9029067