First Gen hikes 2024 capex to $1.27 billion

MANILA, Philippines — The Lopez Group’s First Gen Corp. is almost tripling its capital expenditure (capex) budget to $1.27 billion this year as it continues to beef up its renewable energy (RE) and natural gas portfolio.

The biggest component of the capex, or $670 million, would support the operations of RE subsidiary Energy Development Corp. (EDC), First Gen chief finance officer Emmanuel Antonio Singson told reporters yesterday.

About $526 million was earmarked for the acquisition of the 165-megawatt (MW) Casecnan hydroelectric power plant, while the rest was allocated to finish other natural gas projects.

The country’s largest RE producer had earmarked a capex budget of $440 million last year.

By the end of 2024, First Gen intends to bring to commercial operation seven new power facilities with a total capacity of 83 MW in a bid to increase the country’s supply of electricity.

Of the total, four would be geothermal power plants, and the remaining three would be battery energy storage system (BESS) projects with a total capacity of 40 MW-hours.

Francis Giles Puno, First Gen president and COO said the new geothermal and BESS projects would require P24 billion and P5.3 billion in funding, respectively.

Most of the funding for the projects will come from EDC’s P60-billion programmed spending in 2023.

“We continue to invest. Half of the P60-billion capex goes to drilling; the other half goes to new builds. Geothermal is complicated; you have to build new wells and then work over existing wells,” Puno said.

The Lopez-owned firm recently completed the 29-MW Palayan plant in Bicol that would start operating when there is a need for supply.

Further, the P2.9-billion, 5.6-MW geothermal power plant in Bago City, Negros Occidental, is expected to commence operations in the third quarter of 2024.

Two other geothermal power facilities—the P6.6-billion, 20-MW Tanawon power plant in Bicol and the P7.8-billion, 28-MW Mahanagdong plant in Leyte—will commence operations in the fourth quarter.

The company’s three BESS projects will begin commercial operations toward the end of the year.

“We hope that adding these modest capacities to the grid from clean energy sources will help ease our country’s need for more power supply without creating stress on the environment,” Puno said.