ASEANEWS HEADLINE-INVESTMENT | MANILA: Maharlika getting 20% stake in NGCP

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Maharlika Investment Corp. makes first investment, acquires stake in NGCP | ANC

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MANILA, Philippines — Almost two years after its creation, the Maharlika Investment Corp. (MIC) has finally made its first foray into business by acquiring 20 percent of the company behind the National Grid Corp. of the Philippines (NGCP).

The move is aimed at safeguarding the nation’s power supply from “external threats” and “disruptions.”

Synergy Grid and Development Philippines Inc., which has a 60 percent stake in NGCP, has accepted the binding offer from the Marcos administration, granting MIC two board seats each in SGP and NGCP.

Henry Sy Jr., who serves as SGP chairman and NGCP vice chairman, and MIC president and CEO Rafael Consing Jr. led the signing of the binding term sheet yesterday at Malacañang. President Marcos witnessed the signing.

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“Congratulations, everyone. I know it wasn’t easy. I think, in the end, we found a good solution to everyone’s concern,” Marcos said during the signing ceremony.

“The maiden investment represents a vital opportunity for the government to regain greater influence over the nation’s critical power infrastructure to ensure that every Filipino has access to reliable and affordable power,” Malacañang said.

Under the deal, MIC, which governs the country’s first sovereign wealth fund, will subscribe to preferred shares offered by SGP.

Upon the deal’s closing, Consing said MIC “shall be entitled to two out of nine seats in the SGP board, after the total seats are increased from seven to nine.”

In NGCP, the sovereign wealth fund manager will secure two out of 15 board seats, following an expansion of the board from 10 to 15 members.

The signing of the agreement confirmed earlier reports by The STAR that the negotiations were expected to be finalized this month.

The deal, which marks MIC’s first investment since its creation in 2023, aims to restore the government’s control in the country’s power transmission network, which has been privatized pursuant to the Electric Power Industry Reform Act.

Citing the need to be involved in NGCP’s decision-making processes, Consing said the maiden investment would further safeguard the country’s power supply from external threats and disruptions.

In a statement, Energy Secretary Raphael Lotilla welcomed MIC’s investment in NGCP, saying the move could pave the way for better coordination between the government and the grid operator.

“This is a step towards attaining our goal of ensuring security of supply, reliability, affordability and promoting competition in the power sector,” Lotilla said.

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After a public bidding in 2007, the NGCP was granted a 25-year concession to operate, maintain and develop the country’s power transmission system, with the possibility of renewal for an additional 25 years.

Marcos signed in July 2023 Republic Act 11954, or the Maharlika Investment Fund Act, which the administration said would give the country the capacity to invest in extremely important projects such as agriculture and infrastructure among other investments.