First Gen eyes DMCI as partner for coal power plant in Panay

Lopez-owned First Gen Corp. is looking at the possibility of tapping DMCI Holdings Inc. as partner in building a 100-megawatt (MW) clean coal power facility in Panay Island, a ranking First Gen official said.

"Panay during the day uses primarily diesel and then at night, when demand is low in the Visayas grid, they’re able to bring in some geothermal power from Negros. We believe that there’s room for a genuine baseload plant to come in. So our overall approach to Panay is to partner with DMCI. We’ve been in discussions with them since late last year. It’s logical because of their control of Semirara," First Gen president and chief operating officer Federico Lopez said.

DMCI is engaged in coal mining, general construction, infrastructure and real estate development, and cement manufacturing. The group also provides general construction services such as production and trading of concrete products and electrical and foundation works.

At present, DMCI ‘s general construction business is conducted through its wholly-owned subsidiary, D.M. Consunji Inc. and Atlantic Gulf and Pacific Co. (AG&P). Meanwhile, the real estate and infrastructure project development activities are principally conducted through DMCI Project Developers Inc., (PDI), another wholly owned subsidiary. It has also expanded its business portfolio to engage in the mining and exploration business through another subsidiary, Semirara Mining Corp.

DMCI has been slowly entering the power sector when it joined the bidding for the Calaca power plant last year. The Consunji-led firm recently won the bidding for an off-grid small power utilities group (SPUG) area in Masbate.

First Gen, meanwhile, is the investment vehicle of the Lopez group in power generation. It controls power facilities in Batangas, Nueva Ecija and Mindanao.

Lopez said that they are eyeing majority control of the joint venture. "We will still negotiate with finality with respect to the project sharing, but our general approach is to take majority," he said.

First Gen senior vice president Richard Tantoco, on the other hand, said after getting necessary permits and approval, the construction of the clean coal power plant could take 30 months.

"We expect to get our ECC (environmental compliance certificate) in the next couple months," he said.

Tantoco estimated that the company would spend about $120 million for the 100 MW circulating fluidized bed (CFB) coal plant which will be located in Concepcion, Iloilo. CFB is viewed as "clean coal technology" in terms of air emissions.

First Gen intends to sell the power to be produced in the new Iloilo-based power facility to electric cooperatives in Antique, Iloilo City, Capiz and Aklan.

The plan to put up a coal-fired plant in the Visayas is part of First Gen’s effort to double its capacity in the next five years from 986 MW in 2005 to 1,968 MW in 2011.

The company has also committed to pour in about $1.37 billion in capital expenditures for putting up new power facilities in the near term.