First Gen seen to spend $11.3M for expansion projects

First Generation Holdings Corp., the largest Filipino-controlled power producer, will set aside about $11.3 million for its capital expenditures this year.

Official documents showed that the planned spending for 2006 include expenses for the power augmentation of two natural gas-fired power facilities –1,000-megawatt (MW) Santa Rita and 500-MW San Lorenzo plants.

Part of the power augmentation project is a proposed inlet air cooling (IAC) which the company believes is a proven technology that would increase the generating capacities of the two power plants.

The IAC is a power augmentation technology that uses water sprayed into an inlet air duct of a gas turbine to increase the mass flow of the air duct by making it more humid.

If the technology is applied to the two natural gas-fired power plants, it could result in an increase in power output by approximately 3MW to as much as 15MW per unit depending on the type of inlet air cooling technology installed.

First Gen is in the process of bidding out the contract for the installation of the inlet air cooling technology. Installation is expected to commence within this year once all necessary corporate, lender and regulatory approvals have been obtained.

The company has invested a total of about P2.86 billion over the last three years including the construction of the San Lorenzo power plant. It also funded the overhauling of the generating units at the Santa Rita and San Lorenzo power plants.

Consolidated capital expenditures for 2004 amounted to P510 million, P154 million in 2003 and P2.19 billion in 2002.

For the first nine months of 2005, the company spent P86 million for the acquisition of the Agusan mini-hydropower plant, one of the generating assets of the National Power Corp. (Napocor) sold by the Power Sector Assets and Liabilities Management Corp. (PSALM) last year.

Although First Gen continues to focus on enhancing its position as a leading independent power producer in the Philippines, from time to time it evaluates business opportunities outside the country, such as in Southeast Asia, with a view to acquiring or developing competitive or complementary power generation facilities on commercially reasonable terms.