PHILIPPINE STAR: First Gen mulls .5-billion power plant projects
March 24, 2010
First Gen Corp. is eyeing to spend around .5 billion for the expansion and construction of new power plants over the next three to five years.
On the sidelines of the Management Association of the Philippines (MAP) forum, First Gen president and COO Federico Lopez told reporters that they have identified a number of projects to be carried out over the short and medium-term.
“Some of them are rehabs – rehabs tend to be cheaper, expansion tends to be cheaper – greenfields like geothermal may be more expensive, so you can put a rule-of-thumb of about .5 million per megawatt, roughly .5 billion, something like that,” he said.
He said these expansion, rehab and construction projects will add up about 1,000 megawatts (MW) to their current capacity.
“A lot will be done by different corporations [subsidiaries like Energy Development Corp., First Gas, First Gen Hydrol, not necessarily First Gen,” he said.
Among these projects include the expansion of the company’s 1,500-MW Sta. Rita and San Lorenzo natural gas plants’ capacity, through the 550-MW San Gabriel; and the 112-MW Pantabangan-Masiway hydroelectric power plant by another 77 MW.
He said they are also eyeing to rehabilitate the 150-MW Bacon-Manito geothermal production field that would increase its capacity by 110 MW.
For greenfield or new projects, First Gen is planning to put up the 40-MW Tanawon and 50-MW Apo geothermal power plants, and the 116-MW Burgos wind farm.
He said a major portion of these projects will be funded through loans. But he said there would also be some equity that the company has to put in to keep the projects going.
As this developed, Oscar Lopez, the patriarch of the Lopez clan, who was also in the MAP meeting, said they intend to keep their remaining 6.6 percent stake in Manila Electric Co. (Meralco), the country’s biggest power producer.
Lopez, chairman of First Philippine Holdings Corp., said it may be wise for them to hold on to the remaining shares until prices eventually go higher than P300 per share.
“I could not say. It could stay there forever until price goes over P300,” he said, adding they would want to still be part of the country’s largest power distributor.
But Lopez said they would review their plans for Meralco if its share price moves higher than P300 per share. “(We) will think about it,” he added.
According to Lopez, they are currently mapping out where to put the proceeds from the sale of its 6.6 percent stake to Metro Pacific.
He said it may be utilized for debt payments, finance new projects and payments of additional dividends to stockholders.
“We still have to study.We have to get the money in first,” Lopez said.
Lopez said some proceeds may go to cash dividends “but we don’t want all the money to go there.”
It was estimated that FPHC has maturing loans of P12 to P13 billion in the next five years.
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