First Gen unit secures $265-M credit line for power project

First NatGas Power Corp., a wholly owned subsidiary of First Gen Corp., signed a $265-million export credit facility with KfW IPEX-Bank of Germany with a tenor of 13.7 years to partially finance the 414-megawatt (MW) San Gabriel natural gas-fired power project, which the parent firm said would start supplying the Luzon grid in the first half of 2016.

The Lopez-led firm said in a disclosure to the Philippine Stock Exchange that the facility would have an export credit guarantee from Euler Hermes, acting on behalf of the Federal Republic of Germany.

The proceeds of the loan will be used to finance the eligible German and non-German goods and services under an equipment supply contract signed by the San Gabriel power plant and Siemens AG.

KfW is underwriting the transaction, First Gen said.

Construction of the 414-MW San Gabriel plant has begun with site preparation and piling activity now taking place in Batangas City, while key power plant components are being manufactured overseas, First Gen said.

“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, it can also run on base load,” First Gen president and COO Francis Giles B. Puno said.

According to Siemens, by the time the San Gabriel plant starts commercial operations in March 2016, it will be the most efficient gas-fired power plant in Southeast Asia, with an efficiency rate of more than 60 percent.

The San Gabriel project is one of three units that First Gen is developing in Batangas City. Collectively, the units can generate a total of 1,350 MW.