Luzon power supply to get boost from CBK plant turnover in 2026

The Department of Finance (DOF) has awarded the privatization of the 733.95-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydroelectric power complex to Thunder Consortium, a group composed of Aboitiz Renewables, Inc. (ARI), Sumitomo Corp., and Japan’s Electric Power Development Co. (J-Power).

The consortium submitted the highest bid of PHP36.27 billion, outbidding the PHP19.62 billion offer by the First Gen Prime Energy Corporation and Korea Water Resources (FGKW) Consortium.

Finance Secretary Ralph Recto, who also chairs the Power Sector Assets and Liabilities Management (PSALM) Corporation, said the deal is a step forward in improving Luzon’s energy security.

“The successful privatization of the CBK power plants is a huge win for everyone. It means more reliable and affordable electricity for homes, businesses, and industries,” Recto said. “It is a major milestone for the nation’s energy security and economic stability.”

Located in Laguna and Quezon, the CBK complex includes the 39.52-MW Caliraya hydroelectric power plant in Lumban, the 23.10-MW Botocan plant in Majayjay, and the Kalayaan I and II pumped-storage power facilities, which have capacities of 366 MW and 367.95 MW, respectively.

The Kalayaan units function as large-scale battery storage systems that can help stabilize the power grid during periods of high demand. These plants provide ancillary services and reserve capacity to Luzon’s energy grid and have the potential to be tapped for long-term power supply agreements.

The CBK privatization marks the largest project for PSALM this year. The current 25-year build-rehabilitate-operate-transfer (BROT) contract and power purchase agreement between CBK Power Co. Ltd. and the National Power Corporation will expire in February 2026.

According to officials, the plant is expected to be officially turned over to Thunder Consortium upon the contract’s expiration.

Recto added that turning over operations to the private sector is aligned with the government’s goals of improving energy infrastructure and avoiding future power supply disruptions.

“This ensures that energy supply keeps pace with economic growth. This is the kind of strategic investment we need,” he said.