First Philippine Holdings to pursue power projects that will generate 280 MW

MANILA, Philippines — The Lopez-led First Philippine Holdings Corp. (FPH) plans to expand its power generation capacity by 280 megawatts in the next three to four years by mostly focusing on renewable energy.

FPH’s recurring earnings might decline this year by about a third compared to that of 2010, company president and chief operating officer Elpidio Ibanez told reporters after the company’s stockholders meeting.

Aside from the absence of one-time gains realized from the sale of shares in Manila Electric Co. in 2010, this year’s performance would be affected by foregone revenues as well as higher expenditures from the rehabilitation of geothermal power plants as well as the continuing suspension of a gas pipeline that previously leaked into a residential tower in Makati, he said.

On power distribution, FPH intends to keep its remaining 6.6 percent stake in Meralco, FPH chair and chief executive officer Federico Lopez said. FPH had sold most of its stake to the First Pacific group.

“There’s no intention of selling. Meralco is doing very well under Manny Pangilinan,” Lopez said.

Richard Tantoco, president of the geothermal unit Energy Development Corp., said the group’s greenfield power projects would focus on geothermal and wind energy.

The group’s power generation, through power holding firm First Gen Corp., has about 2,800 MWs, which will increase by another 130MW by the year’s end as BacMan geothermal power plant comes back on stream. At the same time, the group is drilling in new sectors within BacMan, scheduled for delivery to the national grid by 2014-2015.

Meanwhile, a wind power project in Burgos, Ilocos Norte, is in the pipeline with a projected capacity of 85 to 100 MW. Tantoco said EDC was hoping to start this project, which would cost $280 million to $300 million, within the year.

The 280-MW increase in capacity planned by 2014-2015 assumes that this wind project will move ahead while additional capacity in Bicol and Mindanao will progress as planned.

This capital, FPH’s group-wide capital spending is set at around P8.8 billion, consisting of around P6.8 billion for EDC’s expansion and another P2 billion for the solar wafer projects of the First Philec Solar Corp.