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The Agus-Pulangi Hydropower Complex (APHC), consisting of seven hydropower plants, is badly in need of rehabilitation.

According to the Department of Energy, only around 600 to 700 MW of capacity is currently operational due to aging infrastructure, representing 60 to 70 percent of the total capacity.

With a combined capacity of approximately 1,000 MW, the Agus and Pulangi power plant complexes supply more than 50 percent of Mindanao’s total electricity requirements to electric power consumers.

The Agus power plant complex consists of six cascading power plants snaking from the mouth of Lake Lanao in Marawi City down to the majestic Maria Cristina Falls in Iligan City. Strategically located along the Agus River, these hydroelectric power plants help fuel the economy of Mindanao by providing a steady supply of cheap and reliable electricity, according to the National Power Corp. (NPC).

Meanwhile, the Pulangi IV hydroelectric plant is located in Maramag, Bukidnon.

The government is hoping to rehabilitate all seven run-of-river hydroelectric power plants in the complex to their full capacity.

A World Bank report noted that the APHC has been the backbone of the power generation system in Mindanao for decades. It said most of the APHC plants have been in operation for more than three decades and badly require rehabilitation to extend their operational life, recover capacity and energy output, and enhance the safety of dams and the reliability of supply.

APHC is still owned by the Power Sector Assets and Liabilities Management Corp. (PSALM) and operated by the NPC due to the fragility and conflict in Mindanao, it said. It is slated for rehabilitation in the Mindanao Energy Plant 2018-2040.

The report also pointed out that in the immediate future, increases in power capacity in Mindanao, likely dominated by coal-fired generation, will further increase the base load capacity of the system and will need to be accompanied by adequate regulating hydropower capacity to provide load-following and other ancillary services. In the medium term, increased energy generated from APHC will reduce the need to rely on further development of coal-fired power plants. However, to achieve this, APHC needs to be rehabilitated to enhance its reliability by restoring the rated capacity of the plants, extending their operating life, and ensuring the safety of the power complex, according to the World Bank.

Without rehabilitation, these hydropower plants (Agus I, II, IV, V, VI and VII and Pulangi IV) are expected to deteriorate further until they soon become obsolete, it emphasized.

According to PSALM, two companies have formally expressed interest in rehabilitating the aging APHC, and it has already received two unsolicited proposals for the long-delayed rehabilitation of the state-owned complex.

Under PSALM’s plan, the rehabilitation will be pursued through a concession-type agreement rather than a direct sale since the Electric Power Industry Reform Act places restrictions on the privatization of the complex.

PSALM president and chief executive officer Dennis Edward dela Serna said that the project could be awarded this year, while the rehabilitation works could begin by 2027 or 2028. The winning proponent, he explained, would be allowed to recover investments by selling electricity produced by the rehabilitated facilities within the concession period.

The World Bank estimated the rehabilitation of the APHC power units and infrastructure at around $290 million. But PSALM said that they are still awaiting the results of the Asian Development Bank’s feasibility study to determine the projected cost of the rehabilitation.

The rehabilitation of these power plants is a matter of national importance. It affects power reliability in Mindanao, electricity prices, and public confidence in the government’s handling of major infrastructure projects. Precisely because of its significance, the process governing it must be beyond reproach.

Recent developments, however, raise serious questions.

In October 2025, the Public-Private Partnership (PPP) Center accepted and endorsed the first unsolicited proposal for the modernization of the APHC. That proposal entered formal evaluation in accordance with the PPP Code.

Yet only weeks later, the PPP Center endorsed the second unsolicited proposal covering the same Agus facilities, this time bundled with the Lanao del Sur Electric Cooperative (Lasureco) power distribution system.

Sources say that this endorsement appears to violate the PPP Code’s own rules.

The implementing rules of the PPP Code, under Republic Act 11966, enacted in December 2023, allow only a 10-day window for similar unsolicited proposals. Both proposals involve Agus I and II and substantially the same rehabilitation and operational scope. It was also revealed that the second proposal was submitted well beyond this period and should have been returned to the proponent for participation in the comparative challenge process.

Treating the two proposals as not similar because of added components elevates form over substance. Courts have long recognized that laws must be interpreted purposively, not mechanically. Packaging cannot be used to bypass clear procedural safeguards.

Equally troubling, observers noted, is the inclusion of the Lasureco component, which lies outside PSALM’s ownership and statutory authority. A PPP requires a government implementing agency with legal control over the project. Stretching this definition risks undermining the integrity of the PPP framework itself.

These are not minor technical issues. Unresolved procedural defects invite legal challenges, delay implementation, and ultimately harm the public. For a project as critical as this one, uncertainty is a cost the country cannot afford.

The PPP Center must act decisively and reconsider, if not retract, the endorsement of the second unsolicited proposal. Public–private partnerships succeed only when rules are applied consistently, transparently and fairly. The future of Mindanao’s power supply, and public trust in the PPP process, demand nothing less.

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