Repower Energy Development Corp. (REDC) is stepping up its renewable energy expansion, securing regulatory approval for a new hydropower subsidiary as it pursues a P3.925-billion acquisition that will increase its operating capacity by about 45 percent.

The listed renewable energy company said the Securities and Exchange Commission (SEC) has approved the incorporation of Tagoloan Hydropower Corp. (THC), a wholly owned subsidiary that will develop and operate hydropower projects.

The new unit gives Repower another platform to pursue future hydropower developments, strengthening its pipeline as it expands its renewable energy portfolio.

The approval comes as Repower moves to acquire Taft Hydroenergy Corp. (THEC), owner of the 15.93-megawatt Tubig Hydropower Plant in the Visayas, in one of the company's biggest expansion deals to date.

The acquisition covers 100 percent of THEC from Tokai Corp. and South East Energy Corp. for P3.925 billion, including P1.1 billion in assumed debt.

"The purchase of THEC and its 15.93MW Tubig Hydropower Plant will further grow the portfolio of operational hydropower plants of the company, and thereby contribute to and increase the company's income and cash flow,” the company said.

Once completed, the Tubig plant will become Repower's 10th operating hydropower facility and raise the company's generating capacity by about 45 percent.

"Upon conclusion of this transaction, the new asset will be the 10th operational hydropower plant of the company, thereby increasing the company's operational capacity by around 45 percent," REDC said.

Repower will invest P1.57 billion for its stake in THEC and assume P440 million in debt, while Tokai will invest the same amount, and South East Energy will take the remaining stake. The company said the purchase price was based on the projected cash flows of THEC's hydropower business.

The acquisition remains subject to regulatory approvals, including clearance from the Philippine Competition Commission, and other closing conditions under the share purchase agreement.