Prime Infrastructure Capital Inc. (Prime Infra) agreed to acquire a 60-percent stake in First Gen Corp.’s (First Gen) natural gas business for P50 billion, the companies announced Saturday.
The deal involves Prime Infra, led by businessman Enrique Razon, purchasing a majority stake in First Gen subsidiaries that own and operate its gas-fired power plants.
These include the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel and 97-MW Avion power plants, all located in Batangas City. The transaction also encompasses the proposed 1,200-MW Santa Maria power plant and an interim offshore liquefied natural gas (LNG) terminal, also in Batangas City.
First Gen said it would be entitled to additional “earnout” amounts if certain conditions are met.
According to First Gen, a subsidiary of First Philippine Holdings Corporation, its gas assets are “investments of national significance and indispensable to the country’s energy security.”
The company believes the partnership will allow them to “further nurture, enhance and expand their natural gas platforms to serve as a key solution provider to the country’s program to address energy security.”
First Gen will retain a 40% ownership in the gas business, which it says will “assure proper continuity and stability of its gas operating plants,” benefiting consumers through “more stable, predictable and lower prices.”
First Gen is a leading independent power producer in the Philippines, with 3,668 MW of installed capacity, accounting for about 18 percent of the country’s gross generation. It primarily uses clean and indigenous fuels such as natural gas, geothermal energy, hydroelectric, wind, and solar power.
Prime Infra’s portfolio includes investments in water, sustainable energy, waste management, and sustainable fuels. Its assets include Manila Water Company Inc. and Prime Energy, the operator of the Malampaya deep water gas-to-power project.