Privatizing one of the country’s most critical hydropower assets is never just a transaction—it is a test of policy, market confidence, and technical credibility. Being part of the financial advisory team supporting the Transaction Advisor on the sale of the Caliraya-Botocan-Kalayaan (CBK) Hydroelectric Power Plant Complex in the Philippines was exactly that: a front-row seat to how strategic infrastructure shifts from public ownership to a competitive, transparent market process.
CBK is not a typical hydropower portfolio. It combines reservoir-based hydro with the Kalayaan pumped-storage facility, a key asset for Luzon’s grid stability. This meant our work had to go far deeper than standard valuation. We built a financial framework that captured merchant exposure under WESM, ancillary service opportunities, hydrological uncertainty, and the operating realities of a mature asset. The goal was simple: create a market-credible view of long-term performance while ensuring the government’s interest was fully protected.
One of the biggest challenges lay in balancing commercial attractiveness with operational truth. The asset’s technical condition, rehabilitation needs, and future CapEx requirements had major implications for investor appetite. Aligning engineering inputs with financial structuring required constant coordination—every change in assumed plant availability, water regime, or reservoir protocol had the power to shift valuation outcomes. Ensuring internal consistency across technical, regulatory, legal, and financial workstreams became a defining part of the job.
Stakeholder alignment added another layer of complexity. As a legacy asset embedded in the Philippines’ energy system, CBK carries expectations far beyond its MW capacity. The transaction needed to preserve reliability while enabling private-sector efficiency. Crafting clear, bankable bid rules and qualification criteria was essential—tight enough to ensure capable operators, but broad enough to sustain competitive tension. Engaging with investors revealed diverse strategies: utilities seeking portfolio integration, regional players eyeing market expansion, and funds evaluating CBK as a long-term infrastructure anchor.
The successful sale—around USD 600 million—was more than a financial milestone. It signaled strong market confidence in the Philippines’ privatization program and demonstrated how well-structured processes can unlock value even in complex, technical assets.
For me, this transaction was a powerful reminder that infrastructure advisory sits at the intersection of engineering realities, regulatory nuance, and financial strategy. Guiding a government through such a landmark divestment remains one of the most instructive and rewarding experiences of my career.
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