State-run Maharlika Investment Corp. (MIC), which manages the country’s first sovereign wealth fund (SWF), has signed a cooperation agreement with key government energy agencies to modernize and rehabilitate the aging power transmission system of Mindoro Island, with officials aiming to improve grid reliability and eventually reduce electricity subsidies shouldered by consumers nationwide.

In a statement last Monday, May 25, MIC said it formalized the agreement with also state-run National Power Corp. (NPC), National Transmission Corp. (TransCo), and National Electrification Administration (NEA) under a “whole-of-government” approach to strengthen Mindoro small grid.

Present during the signing were MIC President and Chief Executive Officer (CEO) Rafael Consing Jr., Energy Secretary Sharon Garin, NPC President Jericho Jonas Nograles, NEA Administrator Antonio Mariano Almeda, and newly appointed TransCo President and CEO Joseph Omar Alday Castillo.

The agreement formalizes more than a year of interagency coordination to address longstanding structural weaknesses in Mindoro’s power transmission system, including studies on operational requirements, investment pathways, technical priorities, and institutional coordination mechanisms needed to implement the project.

Under the agreement, MIC will serve as a strategic investor that may help finance, acquire, rehabilitate, and upgrade Mindoro’s off-grid transmission assets currently owned by NPC.

MIC said it would consider financing technical studies to identify the most cost-effective ways to modernize the grid, while retaining sole ownership over the resulting work outputs.

Based on the results of the studies, MIC may lead or participate in the infrastructure upgrades in line with its investment and risk management frameworks.

The agreement also assigns specific responsibilities to participating agencies.

NEA will serve as the lead coordinating body for technical requirements and program implementation, while TransCo will provide technical and operational expertise as the designated small grid system operator (SGSO).

NPC, meanwhile, will provide administrative support, operational data, and facilitate due diligence activities related to its small power utilities group (SPUG) assets at no cost to the participating agencies.

Officials said the project seeks to address the vulnerabilities of Mindoro’s existing off-grid transmission system, which currently operates through a single-loop 69-kilovolt (kV) network that lacks redundancy and leaves the island prone to widespread outages and service interruptions.

Planned upgrades include converting the system into a sectionalized network, deploying modern grid-monitoring technologies, and improving line accessibility to speed up maintenance and restoration work.

The government also sees the project as a step toward Mindoro’s eventual interconnection with the national grid.

Beyond improving grid stability in Mindoro, the project is also expected to reduce electricity subsidies nationwide.

MIC noted that Mindoro accounts for a substantial share of the universal charge for missionary electrification (UCME), which is currently subsidized by electricity consumers across the country.

By reducing system losses and improving the commercial viability of Mindoro small grid, the project aims to lower government subsidy requirements and eventually reduce electricity costs for consumers nationwide.

The latest project adds to MIC’s growing list of strategic investments following its second full year of operations in 2025, including planned investments in energy, agriculture, mining, transportation, logistics, and power infrastructure.

Among these were a proposed acquisition of a stake in National Grid Corp. of the Philippines (NGCP) as well as renewable energy (RE)-related projects.