First Gen set to tap $265-m German loan

Manila Standard Today
By Alena Mae S. Flores | May. 13, 2014 at 12:01am

First Gen Corp. is set to tap a $265-million loan from German bank Kreditanstalt fur Wiederaufbau, or KfW, to partly finance the construction of the 414-megawatt San Gabriel natural gas plant in Batangas.

First Gen is expanding the San Gabriel natural gas plant, beside the existing Sta. Rita and San Lorenzo natural gas facilities, to boost total capacity to 1,500 MW.

“This year, for the San Gabriel, we will tap the same market, KfW. It’s a $265-million, long-term loan. Predominantly, it’s with KfW for the San Gabriel project because it’s linked to equipment supply,” First Gen president Francis Giles Puno told reporters following the annual stockholders’ meeting of the company Monday.

“We’re finalizing the terms,” Puno said. He said the balance of the San Gabriel project cost, amounting to $600 million would be secured from local banks and equity.

The 414-megawatt San Gabriel natural gas plant is being undertaken by wholly-owned subsidiary First NatGas Power Corp.

The plant, which will utilize natural gas from the Malampaya field northwest off Palawan, is expected to go on commercial operation by 2016. The plant will sell electricity to the Luzon grid.

Puno said the company would also develop the 100-MW Avion power plant, also in Batangas, which will utilize aeroderivative technology. The Avion plant is estimated to cost $120 million.

“Avion is the quickest to build. We have the flexibility to build another unit but this will be market dependent,” Puno said.

Puno said both the San Gabriel and Avion power projects would be fueled by natural gas from Malampaya, but the company knew the current gas supply contracts wouild expire in the next 10 years. source