Gas helped build the Lopez family’s First Gen Corp. into one of the country’s biggest power producers. Now the Lopez-led firm is betting hydro storage could eventually become even more valuable.
The company is redirecting around P62 billion, funded largely from the partial sale of its gas business to Prime Infrastructure Capital Inc., into nearly 2,000 megawatts of pumped-storage projects including Wawa and Pakil.
The payoff First Gen sees is significant. Beginning 2031, the projects are projected to contribute around P16 billion annually under a 20-year government-backed power supply agreement.
“This represents one of the largest strategic investments in First Gen’s history: a transformational expansion that materially deepens the company’s renewables platform,” First Gen president Giles Puno said during the company’s stockholders’ meeting on Thursday.
The projects could eventually generate around three times more than the historical earnings contribution of the 60 percent gas stake between 2019 and 2024, reinforcing First Gen’s early push into long-duration renewable energy storage.
Big picture
First Gen is betting electricity storage will become increasingly critical as more solar and wind power enters the grid.
“As renewables continue to scale, one of the central challenges facing power systems is no longer simply generation, but operational flexibility - the ability to store energy when supply is abundant, and deliver it when the system needs it most,” Puno said.
“This is where pumped storage becomes critical. Unlike conventional batteries, pumped-storage hydro can deliver long-duration storage at scale, with flexibility to generate electricity continuously for ten hours.”
The company believes its geothermal and hydro assets give it an advantage because geothermal plants provide stable round-the-clock electricity while hydro storage helps balance swings in solar and wind generation.
Beyond electricity generation, Puno said hydro facilities also support irrigation, flood control, agricultural productivity and overall grid stability.
Why First Gen sold part of its gas business
The renewable pivot also helps explain why First Gen diluted a gas platform that had long anchored the company’s earnings.
Several long-term electricity supply contracts across the gas portfolio had already expired, exposing the business to more volatile power prices and increasing uncertainty over future earnings.
“The transaction was not simply a portfolio adjustment, but a disciplined strategic decision that strengthened the competitiveness and flexibility of the platform,” Puno said.
“This also allowed First Gen to recycle capital toward renewable energy, particularly hydropower and long-duration storage infrastructure that will support the country’s next phase of energy transition.”
First Gen declares dividends
First Gen declared a regular cash dividend of P0.40 per common share, translating to a total payout of about P1.44 billion.
Shareholders on record as of June 11, 2026 will receive the dividend on June 30 after the board approved the payout on May 28.
First Gen shares slumped 2.4 percent to P15.60 each, adding to losses of about 12 percent so far this year.
—Edited by Miguel R. Camus
