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Brix Lelis - The Philippine Star
June 1, 2025 | 12:00am
MANILA, Philippines — Prime Infrastructure Capital Inc. of billionaire Enrique Razon Jr. is acquiring a 60-percent stake in Lopez-led First Gen Corp.’s gas business for P50 billion.
In a regulatory filing, First Gen said it executed a term sheet with Prime Infra for the purchase of a controlling stake in the former’s subsidiaries managing its gas business.
“The partnership between First Gen and Prime Infra will enable the partners 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 said.
The deal covers First Gen’s four existing gas-fired power plants totaling over 2,000 megawatts, the proposed 1,200-MW Santa Maria facility and an interim offshore liquefied natural gas terminal in Batangas.
The planned acquisition is “subject to the execution of definitive agreements and the closing of the transaction,” First Gen told the Securities and Exchange Commission.
Upon the deal’s closing, Prime Infra will indirectly own 60 percent of the assets, with the Lopez Group retaining a 40-percent stake.
First Gen, in turn, will be entitled to receive “additional earnout amounts, subject to the fulfillment of certain conditions.”
The Lopez-led firm said maintaining a 40-percent interest would help ensure continuity and stable operation of the gas-operating plants.
This landmark deal is expected to “greatly benefit consumers by way of more stable, predictable and lower prices, far removed from the uncertainties of spot purchases,” it said.
First Gen’s gas plants – 1,000-MW Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel and 97-MW Avion – have been supplied by the Malampaya field, an indigenous gas resource in offshore Palawan operated by Razon’s Prime Energy.
The Santa Rita and San Lorenzo plants are currently supplying electricity to Manila Electric Co. (Meralco) under existing power supply agreements (PSAs) set to expire in August 2025 and October 2027, respectively.
With these contracts nearing expiration, the Lopez Group risks losing its leverage in the market.
A similar scenario played out in February last year, when the PSA between Meralco and the San Gabriel plant expired, causing a significant blow to First Gen’s financial performance.
