First Gen, Marubeni tie up for acquisition of power assets

Japanese firm Marubeni Corp. and the Lopez-owned First Generation Holdings Corp. will form a joint venture company that will engage in the acquisition of non-gas power generation assets.

The tie-up will specifically target generation assets to be sold by the Power Sector Assets and Liabilities Management Corp. (PSALM) and the Philippine National Oil Co.-Energy Development Corp.

The company also intends to acquire certain privately-owned power generation facilities.

Marubeni and First Gen entered into a memorandum of understanding in October last year for the formation of such joint venture.

In line with its growth strategy, First Gen, which is in the middle of a $180-million (P9.4 billion) initial public offering (IPO), is evaluating the feasibility of acquiring existing generation facilities.

In particular, the company intends to participate in the bidding for selected National Power Corp. (Napocor)-owned power generation plants scheduled for privatization.

Among these are the 600-megawatt Calaca plant and the 850-MW Sucat power facility.

It also plans to evaluate the acquisition of privately-owned power generation facilities in the Philippines that may be put up for sale by other power generation companies.

Part of the proceeds from its IPO is intended to finance these planned acquisitions.

Under the terms of the MOU with Marubeni, First Gen will also look into the development and construction of some co-generation facilities to supply power to malls, hospitals, hotels and industrial estates.

In addition, First Gen is also looking into the possibility of exploring opportunities in other energy-related fields such as operating a fuel logistics business.

This particular business may involve the development and construction of liquefied natural gas import terminals, petroleum tanker chartering, and oil pipeline management.

The firm is currently supervising the operations of its affiliate First Philippine Industrial Corp. (FPIC) which is engaged in transporting the petroleum products of Shell and Caltex from Batangas province to depots in Metro Manila.