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Monday, February 26, 2024

PCC clears Fresh Lake’s acquisition of Casecnan plant

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The Philippine Competition Commission (PCC) approved the acquisition of the Casecnan Hydroelectric Power Plant (CHEPP) by Fresh River Lakes Corp. from state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) and the National Irrigation Administration (NIA).

The antitrust agency, on Jan. 25, 2024, cleared the take-over of the power plant after previous assessments showed no substantial lessening of competition in relevant markets.

It said its Mergers and Acquisitions Office (MAO) conducted the first phase review of the deal on Dec. 15, 2023 on potential antitrust concerns that may arise from the transaction.

Based on MAO’s assessments, competing energy generation companies exert competitive pressure on the parties, while the volume generated by the Casecnan plant is unlikely to impact the relevant markets.

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

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The deal aligns with PSALM’s mandate under the EPIRA to privatize all assets and liquidate all financial obligations of state-owned National Power Corp. (NPC).

Fresh River secured the 165-megawatt Casecnan Plant, with the highest bid of $526 million.

The facility located near Pantabangan and Munoz, Nueva Ecija is a run-of-river hydroelectric power plant, which diverts water from the Casecnan and Taan Rivers through a 26-kilometer-long tunnel to generate energy.

The PCC is mandated under the Philippine Competition Act (PCA) to review mergers and acquisitions to ensure that these deals will not substantially lessen competition in the relevant markets and harm consumer welfare.

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