Philippines wealth fund invests in China-backed grid operator, despite tensions
The Philippines' sovereign wealth fund Maharlika Investment Corp is buying a 20 per cent stake in the operator of the country's power grid, the government said on Monday, a first major investment that tightens its grip on critical infrastructure.
National Grid Corp of the Philippines holds a 25-year concession to run the country's sole power transmission operator since winning the contract in 2007. Amid escalating tensions between Manila and Beijing over disputes in the South China Sea, NGCP is currently the subject of a congressional investigation into its compliance with franchise obligations and its ownership, with China's State Grid Corp holding a 40 per cent stake.
'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,' Philippine President Ferdinand Marcos Jnr's office said in a statement without giving financial details.
The deal allows Maharlika to subscribe to preferred shares offered by Synergy Grid & Development Philippines (SGP), which would give the wealth fund two seats each at NGCP and SGP. People hold signs during a protest at Mendiola in Manila on July 18, 2023 to condemn the passing into law of the Mahalika sovereign wealth fund. Photo: AFP
SGP effectively controls 60 per cent of NGCP through a common corporate structure of the latter's two largest Filipino shareholders, tycoons Henry Sy Jnr and Roberto Coyiuto Jnr
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