In a strategic move to bolster its commitment to sustainable and innovative investments, Maharlika Investment Corp. (MIC) is seeking board approval to raise an impressive $1 billion dedicated exclusively to energy projects, as revealed by MIC's CEO and President, Rafael D. Consing, Jr. The announcement was made during a recent forum organized by the German-Philippine Chamber of Commerce and Industry.
The funds, earmarked for energy initiatives, highlight MIC's dedication to advancing the global shift towards renewable energy sources. Mr. Consing expressed the intention to pursue private equity and limited partnerships (LPs), potentially involving sovereign wealth funds from other countries, to realize this substantial financial goal.
"We are speaking to some sovereign wealth funds this early, and we have to go through a formal process," Mr. Consing shared, underlining the intricate nature of the negotiations and partnerships involved in such a significant financial endeavor.
MIC is currently in the process of setting sectoral limits, determining the maximum amount to be invested in each priority sector. Mr. Consing emphasized the strategic advantage of creating a fund structure, stating, "If you create a fund, in which case, our sector limit is going to be our contribution to the fund, then we're able to increase our spending effectively."
The corporation has established risk and sectoral limits, currently set at around 15% of assets under management (AUM). This implies that, for every sector, MIC can only invest approximately 15% of total funds. These percentages may undergo fine-tuning in the coming years.
With an initial capital of P125 billion, MIC intends to collaborate with sovereign wealth funds, creating limited partnerships to broaden its investment reach. The sovereign wealth funds will contribute to the fund, and MIC's contribution, representing its risk limit, will effectively convert to $1 billion. This approach allows for more extensive investment deployment, enabling MIC to allocate funds multiple times within the set limit.
MIC has identified several priority sectors, including energy, physical and digital infrastructure, food security, aviation and aerospace, mineral processing, transportation, and tourism. Under the energy sector, the corporation aims to invest in renewable energy, grid modernization, electricity distribution, and new sources to diversify supply and create price stability.
The bulk of the initial investments from the $1 billion fund are expected to focus on energy projects, with Mr. Consing projecting an announcement regarding the first commitment, likely in the energy sector, within the next two to three months.
MIC, with an authorized capital stock of P500 billion, drew its initial capital of P125 billion from contributions from the Land Bank of the Philippines (P50 billion), Development Bank of the Philippines (P25 billion), and the National Government (P50 billion). The corporation's ambitious energy funding initiative positions it as a key player in driving sustainable and transformative developments within the energy sector.
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