GIC, MIRA complete $1.3bn Filipino geothermal buy

The deal marks GIC’s first infrastructure investment in the Philippines.

Macquarie Infrastructure and Real Assets and Arran Investment, an affiliate of Singaporean sovereign wealth fund GIC, have become substantial shareholders in the Philippines’ largest geothermal energy company, Energy Development Corporation, in a $1.3 billion deal.

The two foreign investors acquired 31.7 percent of EDC’s voting shares from existing shareholders following the success of their August tender offer through a consortium dubbed Philippines Renewable Energy Holdings Corporation. MIRA’s funds will hold a 60 percent stake in the consortium while GIC holds the rest, according to sources familiar with the transaction.

This deal marks GIC’s first infrastructure investment in the Philippines, according to Ang Eng Seng, chief investment officer of infrastructure at GIC. “As a long-term investor, we believe EDC’s unique portfolio of renewable energy assets will continue to generate stable and sustainable returns,” he said.

MIRA did not identify the funds involved in the deal, but it manages a number of Asia-focused vehicles, one of which is the first and largest Philippines infrastructure fund closed, raising $625 million in 2012. The vehicle has committed about $500 million across six infrastructure assets in the Philippines. The fund manager is also raising its second Asia-focused infrastructure fund, which has secured a $300 million cornerstone commitment from Canada’s AIMCo.

GIC and MIRA, which own and operate a combined 11GW of renewables globally, expect to form a long-term partnership with First Gen Corporation, the majority owner of EDC, to support the company’s long-term growth. First Gen is also a major power producer in the Philippines with about 3.5GW of power assets in its portfolio.

EDC is the largest vertically integrated geothermal company in the world, with nearly 1.5GW of clean and renewable energy assets, according to MIRA.