KKR to invest more in Philippine energy sector

MANILA, Philippines — Global investment firm KKR & Co. Inc. is looking to pour in substantial investments into the Philippine energy sector as it moves to develop more clean energy sources.

KKR, listed in the New York Stock Exchange, sees strong investment opportunities in the Philippine market as it undergoes an energy transition, KKR’s Asia Pacific Infrastructure Team managing director Michael de Guzman said in an e-mail response to The STAR.

“In terms of KKR’s approach and portfolio, KKR is committed to investing in a just energy transition, one that supports a shift to a clean energy future while recognizing the ongoing importance of supplying the conventional energy needed for well-being and economic growth around the world today,” he said.

Part of investing in the energy transition includes investment in renewables.

“We invest in a diverse range of energy sources, including renewable energy, such as wind and solar power generation, where we emphasize progress towards a stable energy transition and improved environment, social and governance (ESG) practices,” de Guzman said.

“We agree that the Philippines has huge potential to develop more renewable and clean energy sources, and we hope that KKR can continue to invest significant capital into this sector and the country overall,” he said.

Since 2011, KKR has deployed approximately $5 billion of total equity into renewable assets, which have a power generation capacity of 12.5 gigawatts (GW) globally.

KKR is  looking to increase its stake in First Gen Corp., a leading independent power producer in the Philippines that primarily utilizes clean and indigenous fuels such as natural gas, geothermal energy from steam, hydro-electric, wind, and solar power.

“After having been invested in First Gen for this past year, our admiration for the business, for its work to support the energy transition in the Philippines, and for the Lopez family has only increased. The positive experience that we have had as investors in First Gen has strengthened our conviction in the company and its mission, and so we are looking to increase our shareholding,” de Guzman said.

Through its affiliate Philippines Clean Energy Holding Inc., KKR made a tender offer to acquire a minimum of 107.9 million to 205 million outstanding common shares by way of secondary sale from existing shareholders of First Gen for P33 apiece.

The shares to be acquired, which represent approximately three to 5.7 percent of First Gen, amount to a minimum of P3.56 billion to a maximum of P6.765 billion.

KKR has a 12.59 percent stake in First Gen through Singaporean firm Valorous Asia Holdings Pte. Ltd.

“KKR has made this Tender Offer in good faith and would welcome the additional opportunity to positively engage with First Gen’s management team and the Lopez family as helpful in the future,” de Guzman said.

Listed on the New York Stock Exchange, KKR is a global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds.

KKR earlier said First Gen is its first power investment in the country, having invested in Voyager in 2018 and in the hospital unit of Metro Pacific Investments Corp.  in October 2019.