First Gen Corporation has signed a strategic agreement with Prime Infrastructure Capital, Inc. (Prime Infra) that will see Prime Infra acquiring a 60% equity interest in First Gen’s gas-fired power generation business. The move marks a pivotal development in the Philippine energy landscape and aligns with the country’s broader goals of enhancing energy security while pursuing a more sustainable and low-carbon future.

The partnership involves the transfer of a 60% stake in several of First Gen’s major gas assets, all of which are located in Batangas City. These assets include the 1,000-megawatt (MW) Santa Rita Power Plant, the 500 MW San Lorenzo Power Plant, the 450 MW San Gabriel Power Plant, the 97 MW Avion Power Plant, and the proposed 1,200 MW Santa Maria Power Plant. Additionally, the transaction covers the Interim Offshore LNG Terminal, a crucial component of the country’s future liquefied natural gas infrastructure.

As part of the agreement, Prime Infra will pay First Gen PHP 50 billion upon the deal’s closing. The final payment may be adjusted based on agreed conditions between both parties. Furthermore, First Gen is entitled to receive additional earn-out amounts, depending on the fulfillment of specific milestones and performance criteria after the transaction is finalized.

First Gen’s Chairman and CEO, Federico Lopez, emphasized the importance of the partnership, stating that it is built on mutual trust and a shared vision for a clean energy future. “This collaboration is a significant step forward in our mission to build a decarbonized and regenerative energy system. Natural gas remains the most practical transition fuel as we move toward broader adoption of renewable energy technologies,” Lopez said. He added that continued investment in LNG is essential for maintaining energy security in the Philippines and enabling the growth of renewable energy in the national grid.

Following the completion of the deal, Prime Infra will hold a 60% controlling interest in First Gen’s Batangas gas plants, while First Gen will retain 40%. Ownership of the LNG terminal will be divided among Prime Infra (60%), First Gen (20%), and Tokyo Gas of Japan (20%).

The companies also expressed their intent to work closely with the Philippine government to strengthen national energy independence and promote energy resiliency. First Gen is currently the country’s leading producer of renewable energy and contributes approximately 18% to the Philippines’ total power supply.

Prime Infra, on the other hand, is known for its involvement in critical infrastructure projects. It is the controlling stakeholder in Manila Water Company, Inc., a publicly listed firm that serves over 7.7 million residents, and in Prime Energy, the operator of the Malampaya deepwater gas-to-power project.

This partnership is expected to bolster both companies’ capabilities in meeting the evolving energy needs of the Philippines while laying the groundwork for a more sustainable energy ecosystem.