November 05, 2014

K-water assumes operations of Angat hydro plant

The Power Sector Assets and Liabilities Management Corp (PSALM) announced last week that Korea Water Resources Corp (K-Water) took over the operations of the 218-MW Angat Hydroelectric Power Plant (HEPP) on Friday after paying the government US$440m. The amount represents the full payment of the purchase price.

Our take: The turnover should facilitate the possible entry of conglomerate San Miguel Corp (SMC) into Angat as a local partner of the Korean firm. It can be recalled that SMC through its wholly-owned subsidiary PowerOne Ventures Energy Inc (PVEI) signed a memorandum of agreement (MOA) with K-Water in August 2013 to form a joint venture partnership for the rehabilitation, operation and maintenance of the Angat HEPP.

Under the agreement, SMC will have a 60% equity in the planned special purpose vehicle with K-Water maintaining the remaining 40%. First Gen Corp (FGEN), which lost the bid for Angat, is also reportedly looking at a possible equity partnership in Angat. FGEN had previously confirmed it was in preliminary talks with SMC but formal negotiations would only proceed once the Angat HEPP is finally turned over by PSALM. – WealthSec