The Philippine energy landscape underwent a consequential shift this week as Aboitiz Power Corporation, through its renewable arm Aboitiz Renewables Inc., formally assumed control of the 797-megawatt Caliraya-Botocan-Kalayaan (CBK) hydropower complex in Laguna. The ceremonial turnover, led by Ferdinand Marcos Jr., closed a ₱36.3-billion privatization process that government officials say is intended to bolster the reliability of the Luzon power grid while hastening the country’s pivot toward renewable energy.
The acquisition was executed by the Thunder Consortium, a partnership in which Aboitiz Renewables holds a controlling 64 percent stake. The group also includes two Japanese power-sector veterans, Sumitomo Corporation and Electric Power Development Co., Ltd., better known as J-Power. The consortium emerged as the winning bidder in a competitive auction overseen by the state-run Power Sector Assets and Liabilities Management Corporation in July 2025, before receiving clearance from the Philippine Competition Commission later that year.
Set against the forested highlands of Laguna, the CBK complex comprises three distinct facilities with different roles in the grid. The Caliraya plant in Lumban, with a capacity of 39.37 megawatts, and the 22.91-megawatt Botocan plant in Majayjay rank among the country’s earliest hydroelectric installations, tracing their origins to the postwar push for rural electrification. The centerpiece, however, is the Kalayaan pumped-storage facility, whose combined capacity of roughly 734 megawatts makes it the only operational pumped-storage plant in the Philippines.
Unlike conventional power plants that generate electricity on demand from a steady fuel supply, pumped-storage facilities operate as a form of grid-scale energy storage. When electricity demand is low—or when supply from variable sources such as solar and wind exceeds immediate needs—the plant uses surplus power to pump water to an upper reservoir. When demand spikes, that water is released downhill through turbines, producing electricity almost instantaneously. Energy planners regard this flexibility as increasingly indispensable as the country accelerates the deployment of intermittent renewables.
During the turnover ceremony, President Marcos framed the privatization as part of a broader effort to modernize the power system without sacrificing reliability. He described assets like CBK as “foundational” to a grid that must absorb more clean energy while continuing to meet the demands of a fast-growing economy. The administration, he said, views pumped storage as a stabilizing force that can reduce the risk of brownouts and system-wide disruptions.
Executives at AboitizPower echoed that assessment. Sabin Aboitiz, the company’s chairman, characterized the complex as a strategic buffer—one capable of managing peak demand, providing reserves, and supporting grid services that are difficult to replicate with newer technologies alone. While solar and wind projects can be built quickly, he noted, their output fluctuates with weather and daylight, underscoring the need for dispatchable resources that can respond in seconds rather than hours.
The transaction also highlights the scale of capital required to reshape the Philippines’ energy mix. To finance the purchase, the Thunder Consortium secured up to ₱70 billion in bridge loans from BDO Unibank and Metropolitan Bank & Trust Co., a sum that reflects both the asset’s strategic value and the long-term investment horizon expected of its new owners. Government officials have pointed to the deal as a tangible benefit of the power sector privatization program, which converts state-owned infrastructure into immediate non-tax revenue while transferring operational risk to private operators.
Energy analysts say the timing of the handover is notable. Luzon’s power grid has faced recurring stress in recent years, driven by rising demand, aging baseload plants, and the growing penetration of renewables. In that context, CBK’s pumped-storage capability offers a rare form of insurance—one that can smooth out supply fluctuations and help avoid emergency measures such as rotating outages.
AboitizPower has indicated that the acquisition is not an endpoint but a platform for further investment. Company officials have signaled plans to modernize equipment, enhance digital controls, and improve water management across the complex, measures aimed at extending the facilities’ operational life and improving efficiency. While the firm has not disclosed a detailed timetable, executives have suggested that upgrades will be phased to minimize disruption to the grid.
For the government, the turnover underscores a pragmatic approach to energy transition—one that blends private capital, foreign expertise, and legacy infrastructure. As the Philippines seeks to meet its climate commitments while sustaining economic growth, the Caliraya-Botocan-Kalayaan complex now stands at the intersection of old and new: a mid-20th-century engineering feat repurposed to meet the demands of a 21st-century power system. @KuryenteNews