Razon sets war chest for energy, water deals

Prime Infrastructure Capital Inc. of ports and gaming tycoon Enrique Razon Jr. is funneling more than P55 billion to invest in several energy, safe water, waste management and other projects in its “development pipeline,” according to its executive.

Prime Infra president and CEO Guillaume Lucci said, “we’ll need about, give or take, P50 to P55 billion of equity to support our projects.”

“And of course, the IPO (initial public offering) will play a key role in raising a significant part of the capital we need to deliver the existing pipeline,” Lucci told reporters.

Prime Infra pushed back its P28-billion IPO, supposedly the largest local public listing for 2022, due to volatile market conditions. Originally scheduled in October, the IPO is rescheduled for the first semester of next year.

Through this fundraising activity, the Razon-led company had intended to sell as much as 1.97 billion common shares, including an overallotment option for 179.37 million shares, for up to P14.60 apiece.

With the public offering on the back burner, Lucci said they are exploring other ways to raise money for existing and ongoing projects.

“There’s plenty of different ways to do that whether it’s bond issuances, private placements, short-term debt and all kinds of different things. IPO is our objective and from there after then we’ll see what the best solution is given the context of the market and our needs,” he added.

Lucci also said Prime Infra is “well-positioned” to build projects supporting most urgently needed sustainability goals and the country’s urgent needs.

Prime Infra is bolstering its energy portfolio, investing heavily in renewable energy like solar, hydropower, waste-to-fuel sources and a gas-fired power plant in Iraq.

These include Terra Solar Philippines Inc., a joint venture of Prime Infra and Solar Philippines Power Project Holdings Inc. of Leandro Leviste, which is developing a solar facility considered the largest of its kind in the world.

Solar venture

The planned solar farm entails a combination of 3.5 gigawatts (GW) of solar and 4.5 GW battery project which, upon completion, will deliver 850 megawatts of mid-merit supply to Manila Electric Co. (Meralco).

Mid-merit supply refers to electricity that will be injected into the system when the baseload or main facilities fluctuate.

Terra Solar clinched a 20-year power supply agreement with Meralco which will begin in 2026 to supply electricity. It was priced at P5.80 per kilowatt-hour.

“The commitment that was made vis-à-vis Terra Solar being P200 billion. Keep in mind that we fund our projects with project financing at the asset level. Thus, this is not all parent equity,” said Lucci.

Prime Infra also completed the acquisition of the 45-percent interest in Malampaya deep water gas-to-power project from the Shell Group. As the new Malampaya operator, the firm had signified its commitment to generate as much gas as possible to sustain production in support of the country’s electricity demand.

Meanwhile, another Prime Infra unit Ahunan Power Inc. entered into an agreement to acquire a 67-percent stake in Olympia Violago Water and Power Inc. (OVWPI).

OVWPI, a sister company of Violago-led San Lorenzo Ruiz Builders and Developers Group Inc., is constructing the 500-MW Wawa Pumped Storage Hydropower Project in Rizal.

On the water side, Prime Infra earlier announced the P26-billion Wawa Bulk Water Supply Project started the commercial operation of its water project’s first phase, bringing a vital new water source to populous Metro Manila. It would initially deliver 80 million liters per day of raw water to utility concessionaire Manila Water Co. Inc.

The water source for the metropolis is developed by WawaJVCo Inc., a joint venture between Prime Infra and SLRB.