First Gen investing in Pagbilao

Manila Standard Tody
By Alena Mae S. Flores 

First Gen Corp. has decided to exercise its option and take a minority interest in the 400-megawatt expansion of the Pagbilao coal-fired power project in Quezon province, a company official said Tuesday.

First Gen president Francis Giles Puno said the company “would like to participate” in the Pagbilao coal plant expansion, “because there’s really a need for additional capacity.”

“What has been happening since this year, because of the positive economic growth, is that there is really a need for new capacity. We’re looking at participating [in] a little less than 20 percent,” Puno said.

He said the 400-MW expansion of the existing 735-MW capacity of the Pagbilao coal plant was expected to start next year and to be completed by 2017.

“So we hope to also participate in the expansion as a minority equity participant in Pagbilao,” Puno said.

He said the consortium of TeaM Energy Corp., operator of the Pagbilao coal plant and Aboitiz Power Corp., the plant’s independent power producer administrator, was finalizing the selection of the engineering, procurement and construction contractor.

“They’re finalizing the EPC contract…[and choose] the supplier where they’re gonna source the equipment. But once they do that and they reach financial close, First Gen, we have an option to participate,” Puno said.

TeaM Energy is presently in talks with Mitsubishi Heavy Industries for the EPC contract which it hopes to sign by December.

First Gen was supposed to be the original partner of TeaM Energy, the joint venture of Japanese firms Tokyo Electric Power Corp. and Marubeni Corp., for the purchase of Mirant Philippines’ assets several years ago, but the company withdrew from the venture to focus on greenfield projects.

“When we were a part of TeaM Energy, part of our agreement was that they agreed to give us rights if they decide to expand,’’ Puno said earlier.

Puno said the company’s rights originally covered a third or 30 percent, but after TeaM Energy agreed to pursue the expansion with Aboitiz Power, First Gen’s rights was reduced to 15 percent, or 30 percent of TeaM Energy’s 50-percent stake in the project.

“We have the right to one-third so its 30 percent, but in the case of TeaM Energy, they’re looking at a 50-50 [partnership with Aboitiz] so it will be 30 percent of the TeaM,” he said.   source