The state-run Maharlika Investment Corporation (MIC) has acquired a 20% stake in Synergy Grid & Development Phils. Inc. (PSE:SGP), marking its first major investment since its inception in 2023. This move is set to provide the government a strategic foothold in the National Grid Corporation of the Philippines (NGCP), the country's sole power transmission operator.
The signing of the binding term sheet took place on January 27, 2025, at Malacañang Palace, witnessed by President Ferdinand R. Marcos Jr. MIC President and CEO Rafael Consing Jr. and SGP Chairman Henry T. Sy Jr. formalized the agreement, which will grant MIC board representation in both SGP and NGCP.
SGP currently holds a 40.2% effective ownership in NGCP, making this investment a crucial step for the government to regain influence over the country's critical power infrastructure. Once the acquisition is completed, MIC will secure two out of nine seats on SGP's board (following an increase from seven to nine) and two out of 15 seats on NGCP's board (following an increase from 10 to 15).
This investment aligns with the government's objective of ensuring a reliable, secure, and affordable power supply for all Filipinos. By obtaining representation on NGCP's board, the government can participate in key decision-making processes, particularly on issues concerning national security and transmission reliability.
Background
Since January 2009, NGCP has held full authority over the management and operation of the country's nationwide transmission system under a 25-year concession granted by Congress. While NGCP operates the grid, the transmission assets remain under the ownership of the National Transmission Corporation (TransCo), a government agency created under the Electric Power Industry Reform Act of 2001.
The transaction with MIC comes amid increasing calls for greater government oversight of NGCP, particularly regarding concerns over national security and foreign influence in critical infrastructure. The acquisition is expected to provide the government a stronger role in ensuring transmission stability, expansion, and investment in key energy projects.
Market and Policy Implications
The Department of Energy (DOE) has welcomed the deal, emphasizing its alignment with the Philippine Development Plan (PDP) 2023-2028. DOE Secretary Raphael Lotilla highlighted that the investment supports the government's goal of improving supply security, reliability, and competition in the power sector.
The PDP 2023-2028 states that “investment in transmission expansion offers enormous potential benefits for efficiency by increasing access to low-cost generation, improving reliability, and counterbalancing market power.” MIC's investment in SGP is expected to facilitate these goals by providing government representation in the planning and execution of grid expansion projects.
However, the stock market reacted to the news with a decline in SGP shares, which closed at PHP 10.98 on January 27, down 8.50% from the previous trading day's price of PHP 12.00. This may reflect investor uncertainty over government involvement in a privately operated utility.
What's Next?
The agreement remains subject to several conditions before full execution, including:
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Completion of due diligence on SGP and its subsidiaries.
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Negotiation and execution of definitive agreements.
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Mandatory corporate approvals from involved parties.
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Compliance with the Securities Regulation Code and Philippine Stock Exchange (PSE) listing and disclosure rules.
With these steps in place, MIC's entry into SGP signals a significant shift in the oversight and governance of the nation's power transmission sector. The government's increased role in NGCP is expected to enhance grid security and investment, ensuring long-term benefits for the country's energy infrastructure.