Dechert advises Asian Development Bank on the privatization of critical hydropower assets in the Philippines

Dechert has advised Asian Development Bank (ADB), the regional development institution founded in 1966, on the successful public tender and privatization of the Caliraya-Botocan-Kalayaan Hydroelectric Power Plants ("CBK HEPP"). The CBK HEPP assets, which are among the oldest and largest hydropower assets in the Philippines, are a key piece of the energy network for the Philippines.

The privatization of the 797-megawatt hydropower complex in Laguna will be undertaken by the Thunder Consortium, a consortium of Aboitiz Renewables, Inc., Sumitomo Corporation, and J-Power for a purchase price of P36.27-billion (~US$640-million). The process has been organized through a public tender led by the Power Sector Assets and Liabilities Management Corporation ("PSALM"), the Philippines government-run entity responsible for managing and privatizing state-owned power sector assets.

ADB and its consultant team are advising ADB's client, PSALM, on the sale of CBK HEPP, with Dechert serving as International Legal Expert and Puno & Puno Law Offices acting as National Legal Expert. ADB and PSALM navigated a lengthy public tender process, which included two sets of tenders and interest from over a dozen bidders, including from the Philippines, Japan, Korea, and China.

On 14 August, PSALM, led by President and CEO Dennis Edward A. Dela Serna, convened with National Power Corporation President and CEO Fernando Martin Y. Roxas, and representatives of the Thunder Consortium and Cleanergy 9 Power Inc.¹, to execute the project agreements for the sale of CBK HEPP, as witnessed by the ADB and the consultant team.

"This transaction unlocks the full potential of CBK HEPP through private sector investment and expertise while delivering fiscal benefits to the government," said ADB's Head of the Office of Markets Development and Public-Private Partnership Takeo Koike. "We are proud to have played a role in advancing this landmark deal for the Philippines' clean energy future."

Maria Tan Pedersen, Partner, co-head of Dechert's Emerging Markets product line and leader of Dechert's EMEA Energy Initiative, based in Singapore, said, "This landmark project underscores the growing role of private capital and international partnerships in accelerating the Philippines' clean energy transition. We are proud to advise ADB on this transaction, building on our long-standing relationship. By tapping on our multi-disciplinary team's proven expertise in advising on complex energy and infrastructure deals, we look forward to supporting sustainable energy production and energy security in the Philippines, which is poised to deliver long-term benefits for the country."

The Dechert team was led by partner Maria Tan Pedersen and supported by senior associates Drew Singer and David Good in Singapore.

Footnotes

1. Cleanergy 9 Power Inc. is the project company incorporated by the Thunder Consortium to undertake the project, in accordance with the CBK HEPP bidding procedures.