BUSINESS MIRROR THURSDAY, 16 DECEMBER 2010 19:46 MIGUEL R. CAMUS / REPORTEr
LOPEZ-LED First Philippines Holdings Corp. (FPHC) plans to boost its renewable-energy portfolio, with top officials on Thursday baring plans to invest at least $400 million to build new hydroelectric and wind power facilities in the country over the next few years.
The move also comes as the conglomerate, through subsidiary First Gen Corp., continues to consider its options on the decision of partner BG Group Plc. to sell a 40-percent stake in two natural-gas plants to Korea Electric Power Corp.
FPHC president and chief operating officer Elpidio Ibañez yesterday said the company wants to focus on the power sector. FPHC also owns listed Energy Development Corp. (EDC), the largest geothermal power producer in the Philippines.
“There are too many opportunities within our existing businesses,” said Ibañez.
Through EDC, Ibañez said the company may spend up to $250 million to build wind power facilities that can deliver an initial 86 megawatts (MW), which can eventually be expanded to 200 MW. The wind power plants will be in Ilocos province.
EDC is expected to issue about $200 million worth of bonds to fund the project, said Francis Giles Puno, chief financial officer of FPHC. The project is expected to commence after the feed-in tariff rates are approved by the government, he added.
On the other hand, First Gen wants to pursue $150 million worth of “mini” hydroelectric projects with a total capacity of 50 MW, Puno added.
“We are looking at the feasibility of about three projects in Mindanao,” Puno said. Construction is expected in 2011, with completion seen in “two to three years.”
At present, FPHC’s power portfolio is evenly split between renewable power and natural gas, which it derives from the 1,000, MW Santa Rita facility and the 500-MW San Lorenzo facility, both in Batangas province.
The power plants are 60 percent owned by First Gen, with the reminder held by BG Group. Puno reiterated that the sale of BG Group’s stake, valued at $400 million, is subject to the approval of First Gen.
“If we agree among ourselves that we can acquire the stake, we will buy [BG Group] out,” Puno said.
“If they don’t want to sell on terms mutually acceptable, [BG Group] will continue to be our partner,” added the executive. “What we would like to do is to complete [a potential acquisition] by the first half of next year, though there is no definite deadline.”
Ibañez said the company also plans to beef up its manufacturing business through First Philec Solar Corp., a joint venture with SunPower Philippines Manufacturing Ltd.
The company provides wafer-slicing services, an important component to the solar panel manufacturing process. Ibañez said the company may eventually go into solar power generation.
FPHC posted a nine-month net income of of P25.494 billion, on the back of the P23.618 billion combined gain on the sale of Manila Electric Co. (Meralco) shares in March 2010 and the mark-to-market restatement of its remaining 6.6-percent stake in Meralco.
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