KfW lends $265m to First Gen

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

First NatGas Power Corp., a wholly-owned subsidiary of First Gen Corp., signed a $265-million export credit facility with KfW IPEX-Bank of Germany to partially finance the construction of the 414-megawatt San Gabriel natural gas power project in Batangas City.

The loan carries a tenor of 13.7 years and will be used primarily to finance the eligible German and non-German goods and services under the equipment supply contract of the San Gabriel power plant with Siemens AG, the equipment supplier.

First Gen said in a disclosure to the stock exchange the facility carried an export credit guarantee provided by Euler Hermes, acting on behalf of the Federal Republic of Germany.

“Construction of the 414-MW San Gabriel plant is progressing with site preparation and piling activity in Batangas City, as well as the manufacturing of key power plant components overseas,” First Gen president and chief operating officer Francis Giles Puno said.

“We need to make sure that the plant is built and commissioned on time as it will provide much-needed additional supply to the Luzon grid in the first half of 2016,” Puno said.

He said the San Gabriel project was one of three similar units the company was developing in Batangas City with combined capacity of 1,350 MW.

First Gen is also pioneering the development of a liquefied natural gas import and regasification terminal facility.

“We have started pre-development activities for future units that will enable us to accelerate their development and provide additional capacity to the Luzon grid in 2017 due to its tight supply situation,” Puno said.

Puno, however, said this would depend on the availability of additional natural gas from the Malampaya field before imported liquefied natural gas could be delivered by 2019 or 2020.

He said the San Gabriel plant was envisioned to run on a mid-merit basis, but if needed, it could also run on base load.

“According to Siemens, by the time the San Gabriel plant, which will utilize the SGT6-8000H technology turbine, turns commercial in March 2016, it will be the most efficient gas-fired power plant in Southeast Asia with an efficiency of more than 60 percent,” Puno said.

He said First Gen’s closing of the $265-million term loan from KfW of Germany was a testament to the strength and viability of the San Gabriel project. source