MANILA, Philippines - First Gen Corp. said it is planning to put up another natural gas plant in Batangas.
The 414-MW Sta. Maria power plant is expected to go online by 2017, First Gen president Francis Giles Puno said.
The new plant will be an expansion of the 414-MW San Gabriel natural gas plant, which is expected to start commercial operations in March 2016.
On Thursday, First Gen formally signed a $265 million export credit facility with KfW IPEX-Bank of Germany for the San Gabriel project.
"We're preparing, accelerating the development of a second unit that will come online by 2017," Puno said.
The First Gen official said it is preparing for the expected increase in demand and tightness in supply in the next 2 years.
"When we started San Gabriel, we thought there was oversupply. It's very difficult to build power plants. Fortunately for us, we can build quicker than coal plants. Because of the tight supply this year, we've decided to go ahead," Puno said.
The Lopez-led company will also likely tap KfW to finance the Sta. Maria project.
Meanwhile, Puno said the construction of the 414 MW San Gabriel plant is progressing with site preparation and piling activity in Batangas City, as well as 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. Although it is envisioned to run on a mid-merit basis, if needed, it can also run on base load," Puno said.
The KfW facility will partly finance the San Gabriel natural gas-fired power project, which has a total project cost of around $550 million to $600 million. Proceeds of the loan will be used 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.
When completed, the San Gabriel is expected to become the most efficient gas-fired power plant in Southeast Asia with an efficiency of more than 60 percent.
"Closing this $265 million term loan from KfW of Germany is a testament to the strength and viability of the San Gabriel project. 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. 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 said.
First Gen is also developing the 100 MW Avion open cycle natural gas-fired power plant, which will be adjacent to the existing 1,000 MW Santa Rita and 500 MW San Lorenzo natural gas-fired power plants in Batangas City.
First Gen targets to develop new natural gas projects in Batangas that will provide additional capacity to the Luzon grid by 2017.