First Gen Corp. signed a $200-million term loan agreement with BDO Unibank Inc. to finance the completion of two power plants.
“First Gen intends to use the proceeds from the notes as funding for its subsidiaries’ capital requirements and other general corporate purposes. The facility will have a tenor of 10 years from issue date,” First Gen said in a disclosure to the stock exchange.
BDO Capital & Investment Corp. arranged the capital raising program.
First Gen said it expected to complete the expansion of the 414-megawatt San Gabriel natural gas power plant by the second quarter of 2016. The 97 MW Avion open cycle peaking power plant is expected to start delivering power by the second semester this year.
“Our natural gas platform should see a firm strengthening as we complete our 97-MW Avion open cycle plant within the third quarter 2015 and the 414-MW San Gabriel combined cycle plant within the second quarter 2016, to serve the mid-merit requirements of the Luzon grid,” the company said.
First Gen chairman Federico Puno said the development of the new plants, aside from Santa Rita and San Lorenzo power plants would form as the basis for the development of the LNG import terminal in Batangas, with enough demand to underpin its economic viability.
First Gen currently owns the 1,000-MW Sta. Rita and 500-MW San Lorenzo natural gas power plant in Batangas. The plants are fueled by the Malampaya gas to power project in northwest Palawan.
The company is also pursuing construction of a $1-billion liquefied natural gas regasification terminal in Batangas in preparation for the eventual depletion of the Malampaya gas field by 2024.
First Gen is set to announce its joint venture partner for the planned LNG project in 2016.
Puno said the front-end engineering design was on the second stage of revision as the company was preparing for the tendering process for the construction.
He said the LNG terminal would allow First Gen to import LNG and “address the depletion of the Malampaya gas 10 years from now.”
First Gen tapped French firm Tractebel Engineering for the detailed design of the LNG terminal.
“The FEED is still undergoing fine tuning but when you look at the FEED study, you can now build. Next thing to do is conduct the tender process. We have shortlisted potential contractors that are very capable of building a world class facility, international players. They will be able to deliver the terminal hopefully on time,” he said.
Puno said they planned to award the contract by next year in time for the start of construction in the second half of 2016 or 2017.
“This year we will also announce partners in LNG. We’re looking at offering 50 percent to other partners. It’s a combination of Filipino and foreign partners. The foreign partners will bring expertise in operating the LNG facilities,” he said.