Three Philippine power giants—Manila Electric Company (Meralco), Aboitiz Power Corporation (AboitizPower), and San Miguel Global Power Holdings Corporation (SMGP)—have strengthened their alliance with the recent financial close of a $3.3 billion (approximately ₱192.9 billion) deal.
In disclosures to the Philippine Stock Exchange on Tuesday, Jan. 28, Meralco PowerGen Corp. (MGen), SMGP, and Aboitiz-led Therma NatGas Power, Inc. (TNGP) announced the completion of the financing, paving the way for their liquefied natural gas (LNG) partnership project.
The financing will support MGen and TNGP's joint investment, through Chromite Gas Holdings, Inc. (CGHI), to acquire Linseed Field Corporation (LFC)'s LNG import and regasification terminal in Batangas.
The financial closing also covers MGen and TNGP’s investment in South Premiere Power Corp. (SPPC), Excellent Energy Resources, Inc. (EERI), and Ilijan Primeline Industrial Estate Corp. (IPIEC).
“MGen and TNGP hold 60 percent and 40 percent stakes in CGHI, respectively. Following these transactions, CGHI will own 67 percent of SPPC, EERI, and IPIEC,” Meralco stated.
These acquisitions increase CGHI’s ownership in the three power firms, while San Miguel retains its ownership.
“SMGP will own a 33% stake in SPPC, EERI, IPIEC, and LFC,” the statement added.
This development follows a joint agreement between San Miguel, AboitizPower, and MGen to bolster the country’s energy security while maintaining a competitive energy market.
Last month, the Philippine Competition Commission (PCC) approved the alliance's takeover of the integrated LNG project, addressing potential competition concerns among the three firms.
To mitigate risks to the power generation market, the PCC imposed conditions, including oversight of the Competitive Selection Process (CSP) for transparent Power Supply Agreement (PSA) bidding; independent operation of parent companies to ensure separate management and facilities; and the appointment of independent board members and internal trading units.
Additionally, power plants must report any unplanned power interruptions to the PCC and the Competitive Retail Electricity Market (CREM), and each parent company must appoint a competition compliance officer.
Violations of these conditions will incur penalties of ₱2 million per infraction, among other sanctions.