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Philippine commission clears acquisition of 165 MW Casecnan hydroelectric plant

Philippine commission clears acquisition of 165 MW Casecnan hydroelectric plant

The Philippine Competition Commission (PCC) has cleared Fresh River Lakes Corporation’s proposed acquisition of the 165 MW Casecnan Hydroelectric Power Plant from state-owned Power Sector Assets and Liabilities Management Corporation (PSALM) and National Irrigation Administration (NIA).

The US$526 million transaction would not result in substantial lessening of competition in the relevant markets, PCC found. PCC is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not substantially lessen competition in the relevant markets and harm consumer welfare.

In December 2023, the PCC Mergers and Acquisitions Office opened a Phase 1 review into the deal, which assessed potential antitrust concerns that may arise from the transaction. The office found that:

Competing energy generation companies exert competitive pressure on the parties;

The volume generated by the Casecnan plant is unlikely to impact the relevant markets; and

There are sufficient safeguards in place under the Electric Power Industry Reform Act of 2001 (EPIRA) to ensure that the market remains competitive.

Casecnan is located near Pantabangan and Munoz, Nueva Ecija. It is a run-of-river hydroelectric power plant that diverts water from the Casecnan and Taan rivers through a 26-km-long tunnel to generate electricity.

Fresh River, a subsidiary of First Gen. Corp, will take over the plant.

The sale of the Casecnan plant aligns with PSALM’s mandate under the EPIRA to privatize all assets and liquidate all financial obligations of state-owned National Power Corporation.