First Gen eyes $500-million loan to fund Batangas power project

Business Mirror

Published on Wednesday, 08 May 2013 19:04

Written by Lenie Lectura / Reporter

FIRST Gen Corp. may tap the debt market this year for a $500-million financing package to partly fund the San Gabriel natural-gas power project in Batangas.

“If we need $500 million to $600 million then we have to tap the debt market,” said First Gen President Francis Giles Puno in a press briefing after the company’s stockholders’ meeting. 

First Gen is aggressively pursuing its growth strategy across its portfolio. The San Gabriel project will be built in three phases. The first phase, which consists of 100-megawatt (MW) capacity, can be completed as early as 2014. Puno said the company is in negotiations with various contractors.

Phase 2 will have a 400-MW unit. Construction is expected to start in 2013 and may be completed as early as 2016. That is why First Gen needs to work on its financing plan if it wants to meet the 2016 target, Puno said.

The third phase is composed of two 400-MW units and a liquefied natural gas (LNG) receiving and regassification facility that can be completed by 2018.

The timing of the construction and commercial operation of these projects is dependent on availability of competitively priced gas supply with the first two phases from Malampaya in the initial stages, if available, and the last phase utilizing imported LNG.

First Gen Chief Financial Officer Emmanuel Singson said actual borrowing could take place in the third quarter of the year.

“We will scout the market and try to tap whatever is conducive at that time.  It could be peso, dollar, bilateral or any type of fund-raising,” Singson said. 

Company officials explained that First Gen may borrow in increments. “We continue to tap [financing] slowly. We have to time it very well so we don’t have so much cash all at the same time,” added Puno. 

The said natural gas power project will be built on the same site as First Gen’s two other facilities—the 1,000-MW Santa Rita and 500-MW San Lorenzo plants.

“Strategically, bringing in imported LNG into the Philippines is crucial to grow our gas business on top of providing more energy options that are good for the country. Given our existing assets and track record in natural gas-fired power plants, we clearly have certain advantages in leading the LNG business, including developing LNG import facilities,” said Puno during the meeting.  source