FPHC allots $1.5 billion for new power projects

MANILA, Philippines - Lopez-led First Philippine Holdings Corp. (FPHC), through its power generating units, is looking at boosting its capacity by 400 to 500 megawatts (MW) at an estimated cost of up to $1.5 billion in the next two to three years.

Higher electricity output will allow the holding firm to post triple-digit growth in profits this year, company officials said.

FPHC senior vice-president and chief finance officer Francis Giles B. Puno said the company is targeting 400 to 500 MW of additional capacity for the next two to three years.

Puno said the current capacity of the company is 2,800 MW through geothermal firm Energy Development Corp. (EDC) and renewable energy firm First Gen Corp. Only 1,500 MW is attributable to FPHC.

Puno said the target can easily be achieved if the 550-MW San Gabriel gas-fired power plant in Batangas is pursued, depending on the availability of natural gas.

“We would like to grow the gas business...we are negotiating to source more gas,” Puno said, adding that benchmark investment is $3 million per MW.

First Gen owns 60 percent of First Gas, which owns and operates the 1,000-MW Santa Rita combined-cycle natural gas-fired power plant and the 500-MW San Lorenzo natural gas power plant, both in Batangas.

Puno said the company is also looking at the 86-MW Burgos wind project in Ilocos Norte and 100 MW run-of-river hydropower projects.

“We are very happy to be primarily a power generation company,” said Elpidio L. Ibañez, president and chief operating officer of FPHC.

Ibañez said the power generation business is more competitive compared with power distribution that is heavily regulated.

“We would like to stay in areas we are strong in, particularly  power,” said FPHC chairman and chief executive Federico Lopez when asked if the company is pursuing public-private partnerships.

The company already has its hands full with the rehabilitation of existing power plants, Lopez added.

For full year profits, FPHC expects to maintain the trend in growth recorded in the first quarter.

Recurring net income attributable to equity holders of the parent firm surged 164 percent to P1.86 billion in the first quarter from P704 million a year ago.

“I think a major part of the recurring income in the first quarter is sustainable for the rest of the year,” Ibañez said.

Revenues jumped to P19.77 billion from P16.34 billion in the same period last year given higher power output.

The company is also looking at growing its business outside the Philippines.

Early this month, EDC finalized its takeover of a majority stake in the Longavi geothermal concession in Chile, as well as the Chocopata and Quellaapacheta geothermal authorizations in Peru.

“What we would like to do is generate revenues outside. That is why we are also investing in Peru and Chile so we can turn revenues global,” Lopez said.

Lopez added FPHC is looking at Indonesia for another geothermal power project.

Meanwhile, FPHC might refinance some maturing debts next year.

Ibañez said the company has P9 billion in outstanding debts, down from the peak of P22 billion years ago. Preferred shares worth P4.3 billion that will expire next year might be refinanced next year, Ibañez said.

FPHC also holds shares in Manila Electric Co., Rockwell Land Corp. and solar wafer slicing firm First Philec Nexolon Corp.