Japan Power Giant Joins Philippine Hydropower Project

Osaka-based Kansai Electric Power Co. Inc. is making its first overseas pumped storage hydro (PSH) investment in the Philippines, joining tycoons Enrique Razon Jr. and Federico Lopez in a large-scale project in Rizal. Japan’s second-largest power utility has entered into definitive agreements to acquire a 14 percent equity interest in PMJVCo Holdings Inc., a subsidiary of Razon’s Prime Infrastructure Capital Inc. Financial details of the transaction were not immediately made available. PMJVCo is the parent company of Olympia Violago Water & Power Inc., the owner and operator of the 600-megawatt (MW) Wawa pumped storage hydro (PSH) project in Rizal. Once the Kansai entry is completed, PMJVCo will be 86 percent owned by Prime Hydropower Energy Inc., where FGEN Aqua Power Holdings Inc. holds a 33 percent stake. FGEN Aqua is a subsidiary of Lopez-led First Gen Corp., the country’s third-largest power producer in terms of capacity. Through the investment, Kansai is expected to bring its technical expertise and global expertise to support the completion of the Wawa PSH project, which is targeted to begin commercial operations in 2030. The facility is among two PSH projects covered by the P62-billion deal between First Gen and Prime Infra. Also included in the transaction is the 1,400-MW Pakil PSH facility in Laguna. First Gen expects the hydropower investments to generate about P16 billion in earnings yearly starting in 2031. “While these projects require significant upfront capital and several years for construction before meaningful cash flow generation, the long-term economics remain compelling,” First Gen president and COO Francis Giles Puno said. A PSH facility can function as energy storage to complement power generation from variable renewable energy sources while also injecting electricity into the grid to reinforce supply.