First Gen wants minority stake in Pagbilao expansion project

Business Mirror

22 Oct 2013 

 

Written by Lenie Lectura

First Gen Corp. of the Lopez group will exercise its option to purchase a minority stake in the expansion of the Pagbilao coal-fired power plant.

“Yes, we would like to participate as a minority equity participant in Pagbilao. We’re looking at participating at little less than 20 percent,” First Gen President Francis Giles B. Puno said.

TeaM Energy Philippines owns and operates the plant under a build-operate-transfer scheme, while AboitizPower is the independent power producer administrator.

The facility currently has a capacity of 735 megawatts (MW). The project will increase the facility’s capacity by 400 MW more. The expansion would entail an additional investment of $600 million to $700 million.

“What I understand from Pagbilao is that it is expected to start construction next year and should be completed by sometime 2017. We would like to participate because there’s really a need for additional capacity with the economy growing, there is really a need for new capacity,” Puno said.

First Gen is waiting for the engineering, procurement and construction (EPC) contract to be finalized. “They’re finalizing the EPC contract.  Once they do that and they reach financial close then First Gen will come in,” he added.

TeaM Energy is a joint venture between Japanese firms Marubeni Corp. and Tokyo Electric Power Corp. It gave First Gen the option to have an equity participation of up to 33 percent in the planned Pagbilao expansion. 

However, the expansion will be undertaken by TeaM Energy under a 50-50 joint venture with AboitizPower. As such, First Gen will be entitled to only 15 percent of the whole expansion project. TeaM Energy also operates the 1,200-MW Sual coal plant in Pangasinan.

First Gen subsidiary First Gas, meanwhile, owns and operates the 1,000-MW Santa Rita combined-cycle natural gas-fired power plant and the 500-MW San Lorenzo natural gas power plant, both in Batangas.   source