Maharlika investment in ‘partly China-owned’ NGCP floats

By Rjay Zuriaga Castor

The National Grid Corporation of the Philippines (NGCP), the country’s power grid operator that is partly owned by China, is on the heels of getting an investment from the Maharlika Investment Corporation (MIC).

The idea of the newly-convened MIC investing in the NGCP emerged from the proposal of House Speaker Martin Romualdez to fund infrastructure upgrades for the power grid amid the recent power outage that plunged Panay Island.

“Given these challenges, I propose that the MIC considers investing in the NGCP. This strategic investment could provide essential capital for infrastructure upgrades and help in lowering the cost of electricity for consumers,” said Romualdez.

The power outage in Panay started at noon on Tuesday, January 2, and power returned to normalcy on Friday noon, January 5.

President Ferdinand Marcos Jr. has since then blamed the blackout on the NGCP, citing that the latter failed to adequately fulfill its role of maintaining grid stability.

“Accountability lies with the NGCP. They are tasked with grid stability. Stability involves proactive response to breakdowns and unexpected events — a duty that NGCP unfortunately has not fulfilled adequately,” the president said.

NGCP officially commenced operations as the country’s power transmission service provider in 2009. Holding a 25-year concession contract and a 50-year franchise, the privately-owned corporation is responsible for “operating, maintaining, and developing the country’s state-owned power grid.”

The NGCP is part of a consortium that includes Monte Oro Grid Resources Corp. led by Henry Sy, Jr., Calaca High Power Corporation led by Robert Coyiuto, Jr., and the State Grid Corporation of China (SGCC) as a technical partner.

Regarding its ownership setup, NGCP is controlled by 60 percent of the company, while 40 percent is owned by the SGCC.

INVESTMENT PROPOSAL BACKED

MIC president Rafael Consing Jr. has welcomed the proposal of Romualdez for the NGCP to get an investment from the sovereign wealth fund.

“The National Grid Corporation of the Philippines is the backbone of our nation’s power system, and its stability is inextricably linked to the Philippines’ economic and social well-being. I fully endorse Speaker Martin Romualdez’s proposal for the Maharlika Investment Corporation to strategically invest in NGCP,” Consing said in a statement released by the Presidential Communications Office yesterday.

It is worth noting that there were speculations that Consing has pending court cases against him, but the MIC president denied this, saying, “All cases filed against me have been dismissed.”

He, however, did not provide details on what and when the cases were dismissed.

The MIC president emphasized that the proposal would strengthen the country’s energy sector and would allow the corporation to “leverage its unique financial resources and development expertise to accelerate critical infrastructure upgrades, promote renewable energy integration and improve overall grid efficiency.”

The partnership could also lead to lower energy costs and a more reliable and resilient grid, Consing added.

NGCP previously stated in a release that there is a “need for improved planning to ensure sufficient generation per island, with a well-balanced mix of fuels and technology.”

IS INVESTMENT NECESSARY?

During the height of the January power outage, Iloilo City Mayor Jerry Treñas urged the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) to “crack the whip” on the NGCP to upgrade its transmission lines.

Treñas pointed out that the under-improved transmission lines in the Panay grid resulted in prolonged and recurring power outages in the region.

“Crack the whip. Force them. [To the] ERC, DOE, and Office of the President make use of your residual powers under your mandate,” he said.

Meanwhile, Iloilo Governor Arthur Defensor Jr. mentioned that according to NGCP, one of the long-term solutions to address the power crisis in Panay is the completion of phase 3 of the Cebu-Negros-Panay (CNP) backbone project.

CNP phase 3 involves the construction of 230 kV transmission line facilities from the Barotac Viejo Substation in Iloilo province to the Cebu Substation.

Since phase 3 of the CNP backbone project is yet to be completed in March this year, Panay Island currently cannot receive an external power supply in cases where system disturbances hit the grid.

Romualdez said that MIC’s investment in NGCP has the potential to enhance efficiency, stimulate economic growth, bolster energy security, facilitate the integration of renewable energy, and promote increased accountability in the power grid’s operations.

While the idea is still being considered, Consing emphasized that the decision to invest in NGCP necessitates thorough evaluation and careful due diligence before proceeding.

“Transparency and accountability must be paramount throughout the process to ensure the efficient use of public funds and maximum benefit for the nation. However, the potential rewards are well worth exploring,” Consing said.

“Investing in NGCP through Maharlika is about investing in the Philippines’ future. It will be a bold step towards securing our energy independence, fueling economic prosperity, and ensuring a brighter tomorrow for every Filipino,” he added.