First Gen secures $500 million for debt refinancing

Published April 25, 2017, 10:01 PM By Myrna M. Velasco

http://business.mb.com.ph/2017/04/25/first-gen-secures-500-million-for-debt-refinancing/

Lopez-owned First Gen Corporation has secured $500-million debt facility to refinance outstanding obligations still due to its 1,000-megawatt Santa Rita gas-fired power project.

The credit facility, according to the company, has seven-year term and it was secured from six banks – namely Bank of Commerce, Bank of Philippine Islands, BDO Unibank Inc., Philippine National Bank, Security Bank Corporation; and Sumitomo Mitsui Banking Corporation-Singapore Branch.

First Gen said “the proceeds of the loan will be used to repay the amounts due on First Gas’ existing debt of approximately $243 million.”

The company added “the net proceeds of the refinancing will be used to pay down a portion of First Gen’s existing loans, as well as pre-fund its upcoming maturities.”

First Gen President and COO Francis Giles B. Puno noted the new loan facility is a testament that “our lenders continue to be supportive of our endeavors to deliver clean and cost-efficient power to Filipinos.”

The Santa Rita power plant is the first gas-fired generating facility that the Lopez group developed – to take advantage then of the development of commercial gas from the Malampaya field.

The gas business is a growing platform for the conglomerate – with the recent capacity additions from its 414MW San Gabriel and 97MW Avion plants. Its other project is the 500MW San Lorenzo plant.

“The natural gas platform now stands at 2,011MW and we are working hard to deliver the country’s first LNG (liquefied natural gas) terminal as well as more natural gas-fired power plants,” First Gen noted.

The company is advancing plans on the proposed onshore LNG import terminal – but this is a venture it wants to pursue with prospective partners, including that of state-owned Philippine National Oil Company.

First Gen borrows $500 M to repay debts

By Danessa Rivera (The Philippine Star) | Updated April 25, 2017 - 12:00am

http://www.philstar.com/business/2017/04/25/1693513/first-gen-borrows-500-m-repay-debts

MANILA, Philippines - First Gen Corp. has borrowed $500 million from six banks to repay existing debts.

First Gen disclosed yesterday its wholly-owned subsidiary First Gas Power Corp. signed a $500-million seven-year term loan facility with Bank of Commerce, Bank of the Philippine Islands, BDO Unibank Inc., Philippine National Bank, Security Bank Corp., and Sumitomo Mitsui Banking Corp. Singapore branch.

The proceeds of the loan will be used to repay the amounts due on First Gas’ existing debt of approximately $243 million.

The net proceeds of the refinancing will be used to pay down a portion of First Gen’s existing loans, as well as pre-fund its upcoming maturities.

 “The $500-million debt facility is a testimony to the strong support and continuing confidence of our lenders in First Gen’s natural-gas business. First Gen pioneered this business about 20 years ago and it has since reached even greater heights,” president and COO Francis Giles Puno said.

 “The natural gas platform now stands at 2,011 megawatts (MW) and we are working hard to deliver the country’s first LNG Terminal, as well as more natural gas-fired power plants,” he said.

First Gen, through its subsidiaries, is the largest producer of natural gas-fired power in the Philippines where all of its natural-gas fired plants are located in the First Gen Clean Energy Complex in Batangas City.

First Gas Power owns and operates the 1,000 MW Santa Rita natural gas-fired combined cycle power plant, one of the group’s four natural gas-fired power plants.

Other plants include the 500-MW San Lorenzo, the 97-MW Avion peaking and the 414-MW San Gabriel mid-merit power plants.

Aside from its natural gas portfolio, First Gen is the largest shareholder in Energy Development Corp. (EDC) which owns and operates geothermal, wind, hydro and solar power plants in the country.

DOE pushes mandatory shift to RCOA

By Danessa Rivera (The Philippine Star) | Updated April 25, 2017 - 12:00am

http://www.philstar.com/business/2017/04/25/1693522/doe-pushes-mandatory-shift-rcoa

MANILA, Philippines - The Department of Energy (DOE) is pushing for a mandatory shift to the Retail Competition and Open Access (RCOA), which is being challenged in court.

This is despite earlier pronouncements of supporting a voluntary transition to the open market scheme.

A mandatory transition will actually develop the market by bringing in more competition and allowing more freedom of choice for consumers, DOE Undersecretary Felix William Fuentebella said.

“Freedom of choice is the main content, but what we’re saying is if transition will not be mandatory, there won’t be new players in the retail electricity market and that might limit the choice,” he said.

The position is included in the motion for reconsideration filed with the Supreme Court.

“What we said in the MR (motion for reconsideration) is we are emphasizing on the fairness in developing the market,” Fuentebella said.

Last February, the high court issued a temporary restraining order (TRO) on the DOE and Energy Regulatory Commission (ERC) to implement the mandatory migration of large power consumers to RCOA.

The TRO was sought by the Philippine Chamber of Commerce and Industry, San Beda College Alabang Inc., Ateneo de Manila University and Riverbanks Development Corp., which said the new rules supposedly limits the accredited suppliers for big power consumers which must be given a choice whether to stay with their current distribution utility suppliers.

RCOA is mandated by the Electric Power Industry Reform Act of 2001 which aims to institutionalize competition in the supply of electricity, allowing the electricity end-users to choose their suppliers based on low price and other factors.

The mandatory migration to RCOA of end-users with at least one megawatt (MW) usage was scheduled last Feb. 26.

Previously, the DOE said it would come up with the rules for a voluntary transition to RCOA.

But the ERC commissioners met with DOE Secretary Alfonso Cusi to explain the mandatory shift would actually bring more retail electricity players and eventually promote freedom of choice, Fuentebella said.

The decision, however, is still with the high court whether RCOA would be mandatory or voluntary, he said.

Meanwhile, the Joint Congressional Power Commission would issue its position on the RCOA, said Senator Sherwin Gatchalian, who chairs the Senate Committee on Energy.

“We are now in the process of reviewing the transcript and the spirit of RCOA during its initial deliberation in the Senate and Congress,” he said. “We are still in the process but definitely we will issue a resolution and hopefully that resolution will be used and can be used either in the Supreme Court case.”