Two private energy groups have filed unsolicited offers to rehabilitate the Agus-Pulangi hydropower complex in Mindanao, a set of plants that now run below capacity. The state asset owner, Power Sector Assets and Liabilities Management, confirmed the proposals this week and said evaluation is under way.
Agus-Pulangi’s installed capacity sits near 1,000 megawatts, but only about 600 to 700 megawatts are available due to age and deferred works. Restoring output would add flexible clean power to a grid that now exports electricity to other islands. A concession structure is on the table.
“One’s a consortium, one’s not,” said PSALM President Dennis Edward A. Dela Serna, noting both proponents are established players, in comments reported to Manila media. The report added that a second proposal recently passed a completeness check, clearing the way for a detailed review by PSALM.
Implementation of a concession could begin in 2027, after due process and a market test. No proponent names were disclosed at this stage. The asset could be privatized after rehabilitation is complete, depending on policy settings.
PPP rules shape next steps
Under the Public-Private Partnership Code, unsolicited proposals first go through a completeness check, then a detailed evaluation by the implementing agency. That evaluation must be finished within 90 days once processing starts, after which the agency may negotiate with the chosen proponent before a competitive challenge.
If the agency fails to act after the evaluation period, the proposal can be deemed approved to proceed to negotiation under the law. These timelines are meant to keep processes moving and to support competition. The PPP framework applies to both greenfield builds and brownfield assets.
Energy planners frame the rehabilitation as a reliability and safety project as much as a capacity play.
“If we finish the rehabilitation, it will restore an additional 400 MW of hydropower in Mindanao, which is very significant,” Energy Secretary Raphael Lotilla said earlier this year.
The Department of Energy also linked the work to flood risk management and long term asset integrity around the river system. Sequencing will matter because individual plant outages reduce available supply during construction. Mindanao has been sending power to the Visayas and Luzon, which tightens room for lengthy shutdowns. Contractors will need careful staging to limit curtailments.
Concession economics and delivery risk
PSALM has flagged that a concession could allow the partner to fund and execute rehabilitation while recovering investment through operations over a set term. Earlier guidance suggested the programme could yield up to P90 billion (C$2.2 billion) in cash flows for the owner once completed. That inflow would help retire legacy obligations tied to previous power sector reforms.
The approach mirrors recent moves on other hydro assets, where operation and maintenance, repairs, and capital upgrades sit with a private operator under regulated performance terms. The next milestones are to complete the detailed evaluation, decide on a negotiating counterparty, then run a competitive challenge. If a preferred offer emerges, the concession contract would still pass through approval gates under the PPP Code before award.