Enrique Razon ventures into renewables ahead of clean power boom
MANILA, Philippines — Ports and casino tycoon Enrique Razon will be the latest magnate to venture into renewable energy ahead of its boom, after the government abandoned its energy neutrality in favor of clean power investments.
Razon, the second wealthiest man in the country, is planning to bring public his Prime Infrastructure Capital Inc. in a bid to raise cash to fund renewable energy projects, corporate regulators announced in June.
Prime Infrastructure would sell to the public 1.76 billion common shares at a price of P14.60 each, according to filing documents released by the Securities and Exchange Commission.
If there would be strong investor interest in the initial public offering, the company would sell 175.6 million more shares to meet the extra investor demand. Including the overallotment option, Prime Infrastructure would rake in P28 billion in net proceeds, in what could be the biggest IPO this year in the Philippines.
The Philippines is “probably not where we should be in terms of power supply demand,” Prime Infra Chief Executive Officer Guillaume Lucci was quoted as saying in a Bloomberg article published on Tuesday.
“We’re probably not where we should be in terms of water availability and sanitation, or probably not where we should be in terms of waste management and climate. If you take all that into consideration as an investor, it’s perfectly logical to invest into the Philippines and Prime Infra,” Lucci added.
Of the total funds to be raised from the IPO, P23 billion would go to Prime Infrastructure’s energy business while P3.5 billion would go to the company’s water segment. The remaining P1.1 billion would be spent on projects under the company’s waste and sustainable fuels business.
The IPO is targeted to happen from October 3 to 7 based on filing documents. The company plans to debut on the local stock market “on or about” October 12.
Prime Infrastructure said it has “a solid track record supported by agile and forward thinking.” The company is developing a 140-MW solar power plant in Tanuan, Batangas, which will be built in two phases.
The first 70 MW of the Batangas solar plant is expected to be completed in the first half of 2024 while the second phase comprising 70 MW is expected is targeted to be finished in the second half of 2024.
Razon’s new venture coincided with the government’s decision to no longer accept proposals to construct new coal power plants, a dramatic shift in energy policy that counts on declining costs of renewables.
The moratorium was announced in 2020 in tandem with the relaxation on foreign ownership limits in geothermal energy projects worth $50 million or more, doubling down on the slow transition to clean power seen as a long-term fix to the Philippines’ supply problems and now even sky-high power costs.
The Philippine government seeks to increase the share of renewables in the power mix to 35% by 2030, and 50% by 2040, based on the Energy department's latest Philippine Energy Plan, the country's comprehensive energy blueprint.
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