TOKYO -- Japanese power generator JERA is investing $1.58 billion in the leading utility company in the Philippines, Aboitiz Power, as it hopes to benefit from growing electricity demand in the country while making a transition from coal to cleaner energy.

JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, has signed an agreement to purchase shares from Aboitiz Power's parent company Aboitiz Equity Ventures and its affiliate companies. JERA will own about a 27% stake in Aboitiz Power, it announced on Monday.

The Japanese company hopes to benefit from growing energy demand in the Philippines. Aboitiz Power has a target to increase power generation from its current 4.6 gigawatt, including facilities under construction, to 9.2 gigawatt by 2030, of which 50% would be renewable energy. It wants to reduce the share of coal-fired power plants, which make up more than 60% of its current capacity, with renewable energy and liquefied natural gas.

JERA's large investment decision also comes as the company is aiming to achieve carbon neutrality by 2050. "We would like to work with [Aboitiz], which is a company that has strong motivation to strive toward taking measures against climate change," said JERA President Satoshi Onoda at a news conference.

As demand for LNG power grows in the Philippines, JERA hopes to share its LNG procurement know-how with Aboitiz. JERA will also consider offering its technologies in thermal power plants, as well as working with Aboitiz on renewable energy projects.

In Japan, JERA is working on technologies to use carbon-free alternatives such as ammonia and hydrogen in thermal power plants. In the long term, JERA will consider introducing such technologies in Aboitiz's power plants.

Onoda said that thermal power would still be necessary, given the volatility of renewable energy generation, which generally depends on the weather. "How decarbonization works in rapidly growing countries such as in Asia, would be different from places such as Europe where growth is relatively stagnant," he said.

"We need to be involved because LNG alone or renewable energy alone cannot drive decarbonization effectively" in the Philippines, if the country also hoped to grow its economy, he said. JERA has been expanding its renewable energy portfolio, being involved in wind energy projects in Japan and in Taiwan.