Privatization planned for hydropower projects along Agus and Pulangi rivers in the Philippines

Privatization planned for hydropower projects along Agus and Pulangi rivers
in the Philippines

The Power Sector Assets and Liabilities Management Corp. (PSALM), owned and
managed by the Philippines' state-run National Power Corp. (Napocor), is
awaiting results from a study it commissioned on how to best move from
federally owned power generation facilities towards privatization.

Two key hydroelectric complexes in the study are on the Island of Mindanao
along the Agus and Pulangi rivers, according to published reports.

In 2001, Republic Act 9136, the "Electric Power Industry Reform Act of 2001"
(EPIRA), was enacted to institute reforms within the Philippines power
industry, according to Napocor. This legislation means PSALM must move
several of its power generation assets towards privatization.

The mandate includes removing from federal control the 728-MW Agus cascading
system of plants and the 85-MW Pulangi hydropower complex in Maramag,
Bukidnon. In February 2016, HydroWorld.com reported on a legislative attempt
to form the Mindanao Power Corp., a local government entity on the island,
which would remove the facilities from federal control, in essence
preventing Agus and Pulangi from being privatized.

The Agus complex includes:

80-MW Agus 1; 180-MW Agus II; 158-MW Agus IV; 55-MW Agus V; 200-MW Agus VI;
and 55-MW Agus VII.

Estimates on the amount of revenue generated by privatizing the facilities
have not been released.

The major aspects of EPIRA reforms include: restructuring of the entire
power industry to introduce competition in the generation sector, change
from government to private ownership and introduction of a stable regulatory
framework for the electricity sector.

The deadline to meet EPIRA's requirements is nearing, according to Lourdes
Alzona, PSALM president and chief executive officer.

"Our mandate is to dispose in three years all of the remaining assets,
including the Agus-Pulangi plants," said Alzona, according to the Business
Mirror. "The target for Agus-Pulangi was originally set within this year."

In reports published Feb. 7, Alzona reiterated a statement she made in
December 2016 during the Philippines' Department of Energy's Energy
Investment Forum. During the forum, she said the World Bank's International
Finance Corp. (IFC) would submit the results of a study on privatizing Agus
and Pulangi. On Monday, she said IFC was supposed to submit its study to
PSALM in January, but she requested a deadline extension to March.

Once the report is submitted, Alzona said a copy of the study will be given
to Philippines Sen. Sherwin T. Gatchalian, who chairs the country's Senate
committee on energy.

The Mindanao Development Authority reported in March 2016 that the Agus
complex was only using 113 MW out of its 728 MW capacity.

Although the complex is capable of producing more power, two Napocor
transmission towers were bombed in December 2015, causing the 260 MW
combined capacity of Agus I and Agus II to lose grid-connected transmission
capabilities.

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Link to Original Article:
http://www.hydroworld.com/articles/2017/02/privatization-planned-for-hydropo
wer-projects-along-agus-and-pulangi-rivers-in-the-philippines0.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com