First Gen taps P20-B loan for Casecnan hydro power project
MANILA -Lopez family-led First Gen Corp. will get a fresh P20-billion loan from two major banks to fund its expansion projects, particularly its acquisition of the Casecnan hydroelectric power plant that is expected to augment supply in its other facilities.
In a stock exchange disclosure on Monday, First Gen said it had signed term loan agreements with BDO Unibank Inc. and Bank of the Philippine Islands for “growth projects.”
“We are honored by and grateful for the confidence that the lenders have placed in First Gen. The fresh financing will be used to fund the acquisition of [Casecnan], which is vital to our transition toward a decarbonized regenerative future,” said Emmanuel Singson, First Gen chief financial officer.
First Gen subsidiary Fresh River Lakes Corp. (FRLC) won the 165-megawatt run-of-river hydro power plant during a competitive bidding held by the Power Sector Assets and Liabilities Management Corp. (PSALM) in May this year.
FRLC had bested other bidders with a $526-million offer for the project located in Pantabangan, Nueva Ecija province, but a group of stock market investors raised concerns over First Gen’s bid price, saying that the company’s management needed to justify the amount.
First Gen chief operating officer Francis Giles Puno first announced in September that they were arranging financing for the project, and that his company was “ready” to pay for the bid price.
Puno had also noted that the entire amount “will come from domestic financing.”
Casecnan serves as a main source of irrigation for farmers in Nueva Ecija and supplies energy to the power-hungry Luzon grid. It is expected to augment supply at the Pantabangan-Masiway hydro plant, which is running at reduced capacity due to low water levels.