German bank to help finance San Gabriel power plant

MANILA, Philippines – First NatGas Power Corporation (FNPC), a subsidiary of Lopez-led First Gen Corporation (First Gen), has obtained a $265-million export credit facility to partly finance its 414 megawatt (MW) natural gas-fired power project in San Gabriel, Batangas City.

The loan was inked with KfW IPEX-Bank of Germany (KfW) with a tenor of 13.7 years.

Proceeds of the loan 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.

Siemens had informed First Gen that by the time the San Gabriel plant 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%. It will utilize the SGT6-8000H technology turbine.

“Closing this $265-million term loan from KfW of Germany is a testament to the strength and viability of the San Gabriel project. We are certainly proud to again have KfW as an anchor lender as it was for Santa Rita and San Lorenzo, our previous landmark gas power projects,” First Gen President and COO Francis Giles Puno said on Friday, July 11.

KfW is solely underwriting this transaction and has been very supportive of First Gen’s strategy to develop cleaner and lower-carbon sources of power generation facilities in the country, Puno added.

San Gabriel project is one of 3 power facilities that First Gen is developing in Batangas City totaling 1,350 MW.

President Benigno Aquino III called it a source of “teady supply of energy” while making “more efficient use of fossil fuels.”

“This plant will be crucial to our country’s fortunes. By 2016, we expect that the Luzon grid’s energy demand will have risen to around 11,000 megawatts from the present demand of 10,294 megawatts,” Aquino said during the San Gabriel groundbreaking rites in January.

In progress

Meanwhile, construction of the power facility is “progressing,” Puno assured.

“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. Although it is envisioned to run on a mid-merit basis, if needed, it can also run on base load,” said Puno.

Pre-development activities for future units have already started, to help provide additional capacity to the Luzon grid in 2017 due to its tight supply situation.

“This will also be dependent on the availability of additional natural gas from the Malampaya field before imported liquefied natural gas can possibly be delivered in the 2019 or 2020 timeframe,” Puno said.

First Gen is a Philippine power generation company primarily focused on indigenous, clean, and renewable fuels. With a capacity of 2,763 MW, it accounts for approximately 25% of total installed capacity in the country today.

In addition to its Santa Rita and San Lorenzo power facilities, First Gen is pioneering the development of additional gas-fired power plants and liquefied natural gas (LNG) import and regasification terminal facility. It also owns two hydroelectric power plants with a combined capacity of 132 MW.

First Gen also owns a controlling stake in Energy Development Corporation, the largest supplier of geothermal energy in the Philippines. EDC is developing a 150 MW wind farm in Burgos, Ilocos Norte, which is scheduled to begin operations this year. – Rappler.com