PSALM CBK Privatization

Philippines

The Power Sector Assets and Liabilities Management Corporation (PSALM) engaged the Asian Development Bank (ADB) as transaction advisor to support the structuring and privatization of the Caliraya–Botocan–Kalayaan Hydroelectric Power Plants (CBK) in the Philippines. At the time of the transaction, CBK was operated by an independent power producer and comprises three hydroelectric facilities in Laguna with a combined net contracted capacity of 796.56 MW, including the Kalayaan Pumped Storage Power Plant, the only operational pumped storage facility in the country.

The transaction introduced an innovative structure that combined asset monetization with quasi–public–private partnership and long-term land lease arrangements. This approach enabled private sector participation while retaining public ownership of land and non-power assets and preserving essential public functions, including flood control. It also addressed longstanding challenges related to land tenure and the continued operation of a strategically important energy asset. The competitive privatization process attracted strong interest from domestic and international investors. In July 2025, the consortium comprising Aboitiz Renewables Inc., Sumitomo Corporation, and Electric Power Development Co., Ltd. was selected as the winning bidder for PHP 36.266 billion, approximately USD 641 million. Commercial close was achieved in August 2025, followed by financial close in December 2025, enabling a smooth transition ahead of the expiry of the existing operating contract. Beyond the transaction, the CBK experience informed policy reforms formalizing pumped storage’s role in grid stability, strengthened government finances, safeguarded jobs, embedded gender equality and social inclusion provisions, enhanced power system resilience, and provided a replicable model for asset monetization.