By Sheldeen Joy Talavera, Reporter

Japanese electric utility Kansai Electric Power Co., Inc. (KANSAI) has acquired a minority stake in the 600-megawatt (MW) Wawa pumped storage hydropower project, joining Razon-led Prime Infrastructure Capital, Inc. and Lopez-led First Gen Corp. in developing the $2.57-billion energy storage facility in Rizal province.

In a statement on Thursday, First Gen said KANSAI had signed a definitive agreement to purchase a 14% interest in PMJVCo Holdings, Inc., a subsidiary of Prime Hydropower Energy, Inc. (PHEI). Upon completion of the transaction, PHEI will retain an 86% stake in PMJVCo. FGEN Aqua Power Holdings, Inc., a subsidiary of First Gen, holds a 33% interest in PHEI.

The deal gives KANSAI an indirect 12.18% stake in Olympia Violago Water & Power, Inc. (OVWPI), the PMJVCo subsidiary responsible for developing the Wawa pumped storage hydropower project.

The facility is designed with a storage capacity of 6,000 megawatt-hours (MWh) per day and is slated to begin operations by 2030. The Department of Energy (DoE) has certified the project as an Energy Project of National Significance. Pumped storage hydropower works by pumping water to an upper reservoir during periods of low electricity demand and releasing it through turbines when demand peaks, making it one of the most established forms of large-scale grid energy storage. The Philippines has been seeking to expand such storage infrastructure as it integrates more variable renewable sources like solar and wind into its power mix.

KANSAI is engaged in the generation, transmission, and distribution of electricity, with a portfolio that includes nuclear, thermal, hydropower, and renewable energy assets.

In a separate statement, the company described the investment as its first pumped storage hydropower venture outside Japan. It said the move will raise its attributable overseas power generation capacity to approximately 2,500 MW.

"KANSAI's investment in the project will leverage its knowledge and expertise, and promote the development and expansion of renewable energy both in Japan and overseas, contributing to the realization of a zero-carbon society," the company said.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the investment represents "a strong vote of confidence" in the Wawa project, noting that KANSAI operates some of the world's largest pumped storage facilities.

"Their participation bolsters the commercial wisdom of First Gen's decision to invest in the pumped storage hydro projects of Prime Infra," he told BusinessWorld.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said KANSAI's involvement enhances the project's financial credibility in addition to its technical expertise.

"The involvement of a globally recognized utility sends a positive signal to lenders, investors, and other strategic partners that the project has undergone rigorous commercial and technical evaluation," he said.