Philippines wealth fund buys into China-backed national grid operator
MANILA, Jan 27 (Reuters) - The Philippines' sovereign wealth fund Maharlika Investment Corp is buying a 20% 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 probe into its compliance with franchise obligations and its ownership, with China's State Grid Corp holding a 40% 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 Jr.'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.
SGP effectively controls 60% of NGCP through a common corporate structure of the latter's two largest Filipino shareholders, tycoons Henry Sy Jr. and Roberto Coyiuto Jr.
"Government investment in transmission would make additional capital available for NGCP to deploy in the pursuit of completing transmission projects on time," the Department of Energy (DOE) said in a separate statement.
"Maharlika can pave the way for better coordination between the DOE and the NGCP to help...speed up the interconnection of our power grid across the archipelago," the DOE added.
The DOE said 98% of NGCP projects between 2016 and 2024 were delayed, some by more than nine years.
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