First Gen earmarks $750M for natural gasfired plants

LOPEZ-LED First Gen Corp. (First Gen) is spending up to $750 million on two natural gas-fired power plants in Batangas province to boost electricity supply in the Luzon grid.

First Gen president Francis Giles B. Puno said around $130 million to $150 million is set to be spent for the 97 megawatt (MW) Avion power project and another $550 million to $600 million for the 414-MW San Gabriel power project.

Avion is slated for commercial operation this year and San Gabriel, next year. There have been hitches for Avion that may delay the project but construction and development is progressing, Puno said.

“Avion and San Gabriel are progressing. Avion’s a little late. It will come online by the end of the year. San Gabriel, second quarter of next year,” he said. “There were delays on site preparation.”

Asked whether there are already offtakers or contracted buyers, Puno said the plants’ output will initially be traded in the energy spot market.

The holding firm for the power generation businesses of the Lopez Group also plans to develop two other natural gas projects and a $1-billion liquefied natural gas (LNG) import terminal in Batangas to provide fuel for existing and new natural gas projects.

First Gen earlier secured a $200million loan from BDO Unibank, Inc. to fund its subsidiaries.

In a disclosure to the Philippine Stock Exchange, First Gen said it signed a term loan agreement with BDO Unibank as lender and BDO Capital & Investment Corp. as the arranger. The facility will have a tenor of 10 years.

“First Gen intends to use the proceeds from the notes as funding for its subsidiaries’ capital requirements and other general corporate purposes,” the disclosure read.

A First Gen subsidiary, Prime Meridian Powergen Corp. (PMPC), has applied for a $6.7-million point to point transmission facility, which will be finalized in 2016. This will connect the Avion and San Gabriel projects to the existing switchyard of the 1,000-MW Santa Rita power plant.

To test, commission, and dispatch the plants soon after completion, PMPC proposed an interim connection through the Santa Rita switchyard to the system of the National Grid Corp. of the Philippines (NGCP).

ERC approved the application, saying the point to point connectivity is allowed under law and that NGCP has found the connection to be “technically feasible.”