A significant shift has occurred in the planned investment for a groundbreaking hydropower portfolio. First Gen Corp. has adjusted its financial commitment to Prime Infrastructure Capital, Inc.’s pumped storage projects, scaling back from an initial P75 billion to P61.88 billion.
This revision, formalized on March 6th, also reflects a reduced equity stake for First Gen. The company will now acquire a 33% interest in the portfolio, down from the previously announced 40%, following detailed negotiations between all parties involved.
At the heart of this deal lie two ambitious projects, both designated as vital to the nation’s energy future: the 1,400-megawatt Pakil Pumped Storage Hydroelectric Power Project in Laguna and the 600-megawatt Wawa Pumped Storage Hydroelectric Power Project in Rizal. These developments represent a substantial leap forward in energy storage capabilities.
First Gen anticipates these 2,000 megawatts will seamlessly integrate with its existing power generation assets, including the Pantabangan-Masiway and Casecnan hydroelectric plants. This strategic addition promises to bolster the company’s overall energy output and reliability.
This collaboration builds upon a growing relationship between the two companies. Prime Infra previously invested P50 billion in acquiring a 60% stake in First Gen’s gas assets, demonstrating a mutual commitment to strengthening the Philippines’ energy infrastructure.
The P61.88 billion investment is carefully structured to support the long-term development of these complex projects, with a target operational date of 2030. This phased approach ensures resources are available when and where they are most needed.
The payment plan begins with an initial P16.5 billion, a portion of which will be held in escrow to facilitate necessary corporate restructuring. Subsequent payments, totaling P24.75 billion, are scheduled for 2027 and 2029, secured by Standby Letters of Credit.
An additional P20.625 billion remains contingent, to be released as determined by the Prime Hydropower Energy, Inc. board, directly supporting project needs. This flexible funding mechanism allows for responsive allocation of capital.
Upon completion of the transaction and restructuring, First Gen will hold an indirect 33% ownership in the Pakil project and 28.71% in the Wawa project. This represents a significant foothold in the burgeoning pumped storage hydropower sector.
The companies are working towards finalizing the deal within the year, pending approval from the Philippine Competition Commission. This regulatory step is crucial to ensure fair competition and benefit consumers.
Until the corporate restructuring is complete, Prime Infrastructure will grant irrevocable proxies to First Gen’s subsidiary, FGEN Aqua Power Holdings, Inc., effectively granting them control over their 33% share. This ensures a smooth transition and continued progress on the projects.
This partnership allows First Gen to expand its diverse 3,700-megawatt portfolio, embracing the innovative potential of pumped storage technology. It’s a move poised to reshape the landscape of energy storage in the Philippines.
