FGEN offloads gas stake for RE push

Lopez-led First Gen Corp. (FGEN) is set to secure a much-needed P50-billion war chest to pursue more renewable energy (RE) projects from the sale of a 60 percent stake in its gas business to Razon-led Prime Infrastructure Capital, Inc. (Prime Infra).

FGEN chairman and CEO Federico Lopez said in a statement on Monday that the “partnership provides FGEN with more resources to pursue its various RE projects.”

The deal gives Prime Infra control over 60 percent of the issued and outstanding capital stock of the 1,000-megawatt (MW) Santa Rita Power Plant, 500-MW San Lorenzo Power Plant, 450-MW San Gabriel Power Plant, 97-MW Avion Power Plant, and the proposed 1,200-MW Santa Maria Power Plant. It also covers the Interim Offshore LNG Terminal.

“Our partnership with Prime Infra — built on mutual respect — is a major step in our mission to forge collaborative pathways towards a decarbonized and regenerative future,” Lopez said. 

“We have always believed that natural gas is the most practical fuel to transition ourselves to a future of renewable energy. Our continued presence in LNG underlines our view of its important role in maintaining the country’s energy security and at the same time enabling the adoption of more renewable energy,” he added. 

Upon closing, FGEN will retain a 40 percent stake in the Batangas gas plants, while Prime Infra will hold the majority stake.

Ownership of the LNG terminal will be divided among Prime Infra at 60 percent, FGEN at 20 percent, and Tokyo Gas of Japan at 20 percent.

FGEN’s gas assets, located in Batangas City, are considered vital to national energy security. Both companies said they will work closely with the government to help secure the country’s energy independence.

First Gen is the country’s largest renewable energy producer and supplies about 18 percent of the national power mix. Prime Infra, meanwhile, controls Manila Water Company, Inc. and Prime Energy, which operates the Malampaya gas-to-power project.