First Gen to spend $470M to bolster hydro portfolio
LOPEZ-LED First Gen Corp. is spending about $470 million on hydropower projects over a three-year period to further diversify its clean energy portfolio, which is currently dominated by natural gas-fired power plants.
“The big hydro capex (capital expenditure) would come in 2017, 2018 and 2019,” First Gen chief finance officer Emmanuel Singson told reporters on the sidelines of the company’s stockholders meeting.
The 8-megawatt (MW) Bubunawan hydroelectric power plant project in Bukidnon province, which was expected to come into commercial operation sometime in 2021, would need a capex of about $180 million to $190 million. The 30-MW Puyo hydro project in Agusan del Norte, meanwhile, would be needing about $130 million to $140 million.
Singson said the funding estimate for the 20-MW Tagoloan, also in Bukidnon, has not been firmed up yet but could cost as much as Puyo.
The firm was planning to put up in total five new hydro power projects in Mindanao, but it has yet to finalize a funding program for the 8-MW Tumalaong project in Bukidnon and the 14-MW Cabadbaran project in Agusan del Norte.
By the end of 2016, First Gen is set to have more than 3,000 MW of installed generating capacity, of which more than 2,000 MW will come from natural gas-fired power plants due to the entry of the 97-MW Avion and 414-MW San Gabriel gas-fired power plants.
Singson said Avion took up roughly $120 million for development while San Gabriel took up $600 million.
About $200 million would still be needed to complete the two projects, but the amount has already been secured, First Gen president and chief operating officer Francis Giles B. Puno said.
First Gen’s portfolio by the end of the year would also be composed of a little over 1,000 MW from geothermal power plants, more than 150 MW from solar and wind power under subsidiary Energy Development Corp. (EDC) and 130 MW of hydroelectric power projects.
Officials said First Gen was poised for a rebound in net income this year with its additional energy production capacity.
Singson said the company expected to realize $20 million to $30 million in additional profits this year from the operation of the San Gabriel and Avion plants. San Gabriel should be fully operational by August this year while Avion was also getting ready for full operation, also within the year.
In 2015, First Gen ended with a net income attributable to the parent at $167.3 million, which was $25.8 million lower from the previous year. EDC was primarily responsible for this as it reported nonrecurring gains in 2014.
“More importantly, on a recurring basis, we performed solidly as our attributable net income increased by 6.6 percent to $163 million in 2015 from $152.9 million,” Puno said.
Still, Puno said the company recognized its financial results were below expectations. He said 2016 would be a better year for the company in terms of revenue and income.
