First Gen scales down investment in Prime Infra hydro portfolio to P61.9B

FIRST GEN CORP. has scaled down its planned investment in the pumped storage hydropower portfolio of Razon-led Prime Infrastructure Capital, Inc. (Prime Infra) to P61.88 billion from the P75 billion previously announced.

Under the revised definitive agreements executed on March 6, the Lopez-led power company will now acquire a 33% equity interest in the portfolio, a reduction from the 40% stake originally disclosed in February.

This adjustment in the final investment terms followed what the company described as “following discussions and negotiations” between the participating entities.

The deal targets two massive developments certified as an “energy project of national significance”: the 1,400-megawatt Pakil Pumped Storage Hydroelectric Power Project in Laguna and the 600-megawatt Wawa Pumped Storage Hydroelectric Power Project in Rizal.

First Gen President and Chief Operating Officer Francis Giles B. Puno previously said that the 2,000-megawatt portfolio will “complement its existing assets,” which currently include the 132-megawatt Pantabangan-Masiway and 165-megawatt Casecnan hydroelectric plants.

This alliance deepens the strategic ties between the two entities, following an earlier P50-billion transaction where Prime Infra acquired a 60% stake in First Gen’s gas assets.

The total consideration of P61,875,000,000 is structured to support the long-term development of the projects, which are targeted for operations by 2030.

The payment schedule includes an initial P16.5 billion, a portion of which will be held in escrow pending corporate restructuring.

Two additional tranches backed by Standby Letters of Credit totaling P24.75 billion are due in April 2027 and April 2029.

A contingent balance of P20,625,000,000 is scheduled to be paid in portions “as and when the PHEI (Prime Hydropower Energy, Inc.) board of directors will deem it necessary for use by the projects.”

Upon completion of the transaction and a necessary corporate restructuring of Prime Hydropower Energy, Inc., First Gen will indirectly own 33% of the Pakil project and 28.71% of the Wawa project.

The companies expect to close the deal within the year, pending approval from the Philippine Competition Commission.

Until the restructuring is finalized, Prime Infrastructure will issue irrevocable proxies to First Gen subsidiary FGEN Aqua Power Holdings, Inc. for its 33% share in the relevant entities. This partnership allows First Gen to expand its 3,700-megawatt diverse energy portfolio into critical pumped storage technology. — Sheldeen Joy Talavera