First Gen eyes $30 million in additional revenues

MANILA, Philippines - First Gen Corp., the renewable energy firm of the Lopez Group, is set to book an additional $30 million in revenues from its full ownership of two natural gas-fired power plants in Batangas.

The power generator is still looking at more projects to further expand its portfolio.

“On a yearly basis, $50 million. This year, impact could be $30 million or something like that,” said First Gen chairman and chief executive Federico R. Lopez.

This, after First Gen bought out the remaining 40 percent stake of the BG Group in First Gas Holdings Corp. for $360 million last week.

Prior to the sale, 60-percent owner First Gen had a 900-megawatt (MW) attributable capacity from First Gas, which owns and operates the 1,000-MW Sta. Rita combined-cycle natural gas-fired power plant and the 500-MW San Lorenzo natural gas power plant.

Lopez said additional 600 MW in attributable capacity will have an immediate impact to revenues.

Lopez added that additional revenues will be $50 million per year. This will also positively affect the company’s target of tripling its earnings this year from $35 million last year.

To date, First Gen and its units have a gross generating capacity of 2,763 MW, of which 1,500 MW is natural gas, 1,129 MW is geothermal and 134 MW is hydropower. It accounts for 18 percent of the country’s total installed power generation capacity.

With the full ownership of First Gas, Lopez said the company can now proceed with delayed San Gabriel gas-fired power plant.

In 2005, First Gen secured an environmental permit to build the $400-million, 550-MW San Gabriel gas-fired power plant in Batangas.

“We do not need a joint venture partner anymore [for San Gabriel],” Lopez said.

More projects are still in the pipeline despite the recent hefty spending. First Gen will fund the buyout through loans, internal cash and the proceeds of the P10 billion worth of preferred shares sold early this month.

Lopez said the target of 400-500 MW for new generating capacity for parent firm First Philippine Holdings Corp. (FPHC) still stands.

Funding is a concern but the company will review its balance sheet in the next few months, said FPCH president and chief operating officer Elpidio L. Ibañez.

FPHC, through its power generating units, is looking at increasing its capacity by 400-500 MW in the next two to three years.