First Gen unit, German bank ink deal on $265-M loan for San Gabriel power plant

A unit First Gen Corp. has tapped a German bank for $265-million in loan to partly fund the construction of the 414-megawatt San Gabriel natural gas-fired power project in Batangas City, and provide additional supply to the Luzon grid by March 2016.

 

In a disclosure to the Philippine Stock Exchange Friday, First Gen said wholly-owned subsidiary First NatGas Power Corp. signed with KfW IPEX-Bank of Germany a 13.7-year export credit facility to cover the San Gabriel power project.

 

The company said the facility was guaranteed by Euler Hermes, acting on behalf of the Federal Republic of Germany.

 

"The proceeds of the loan will be used primarily to finance the eligible German and non-German goods and services under the Equipment Supply Contract of the San Gabriel power plant with Siemens AG, the equipment supplier," the disclosure read.

 

The closing of the loan is a testament to the strength and viability of the San Gabriel project, First Gen president and COO Francis Giles B. Puno said in a statement.

 

"We are certainly proud to again have KfW as an anchor lender as it was for Santa Rita and San Lorenzo, our previous landmark gas power projects," he said.

 

"KfW is solely underwriting this transaction and has been very supportive of First Gen’s strategy to develop cleaner and lower-carbon sources of power generation facilities in the country,” he added.

 

The project will use exported German high technology with added value, said Markus Scheer, management board member of KfW.

 

"After completion, San Gabriel will be the most efficient combined cycle gas-fired power plant not only in the Philippines but in the rest of Southeast Asia, a real showcase project for the energy market in the whole region," he said.

 

The construction of the San Gabriel plant is progressing with site preparation and piling activity and the manufacturing of key power plant components overseas.

 

"We need to make sure that the plant is built and commissioned on time as it will provide much-needed additional supply to the Luzon grid in the first half of 2016," he said.

 

San Gabriel plant, which is supposed to run "on a mid-merit basis," can run on base load when needed, Puno said.

 

"According to Siemens, by the time the San Gabriel plant, which will utilize the SGT6-8000H technology turbine, turns commercial in March 2016, it will be the most efficient gas-fired power plant in Southeast Asia with an efficiency of more than 60 percent,” he added.

 

The San Gabriel plant is one of three similar units totaling 1,350 MW being developed by First Gen in Batangas City.

 

"We have started pre-development activities for future units that will enable us to accelerate their development and provide additional capacity to the Luzon grid in 2017 due to its tight supply situation," Puno said.

 

"This will also be dependent on the availability of additional natural gas from the Malampaya field before imported liquefied natural gas can possibly be delivered in the 2019 or 2020 timeframe,” he added. – Danessa O. Rivera/VS, GMA News