First Gen needs $20 billion investment to hit 13-GW capacity target – exec

MANILA, Philippines — Lopez-led First Gen Corp. needs to invest $20 billion (around P1.1 trillion) to achieve its bold 13,000-megawatt (MW) capacity target by 2030, its top executive said.

First Gen president and COO Francis Giles Puno said the multibillion-dollar investment would be primarily directed toward accelerating the rollout of the company’s renewable energy (RE) projects.

In particular, the investments are set to fuel First Gen’s geothermal, solar and hydropower expansion, alongside strategic acquisition opportunities and growth in overseas markets, he noted.

“Within the Philippines, we have a lot of smaller but still important geothermal expansion projects. The largest is Amacan, located in Davao de Oro,” Puno said.

He said First Gen plans to kick off drilling operations in Amacan by next month, aiming to boost its geothermal capacity by at least 70 to 100 MW.

“However, the Amacan project is still in the exploration phase. We are not yet certain if the steam supply will be sufficient to develop a full-scale power plant,” Puno said.

Amid high exploration costs, the company is pinning its hopes on the government’s geothermal resource de-risking facility, which could unlock up to $250 million in funding for developers.

One of the biggest barriers in geothermal development is the risk of early-stage exploration, as drilling wells does not guarantee viable results.

With the geothermal de-risking strategy, the government will offer cost-shared exploration support to developers, covering up to 50 percent of drilling costs through convertible loans.

“If we invest something like P3 billion there (Amacan), and it doesn’t work out, what happens to our P3 billion?” Puno said.

Despite the risks, geothermal development remains a key strategy for the group due to the energy source’s potential to deliver baseload power to the grid, the company executive said.

Baseload supply is the minimum amount of electricity needed on the grid to meet constant demand.

First Gen, through Energy Development Corp. (EDC), operates at least 13 geothermal plants with a total capacity of around 1,200 MW, the largest portfolio of its kind in the Philippines.

EDC recently entered into a joint venture with Jakarta-based PT Dian Swastatika Sentosa to harness around 400 MW of geothermal potential in Indonesia.

Apart from geothermal, Puno said, First Gen is also eyeing other clean energy technologies to boost its portfolio.

Currently, the company’s RE portfolio also includes hydro, wind and solar assets with an aggregate installed capacity of more than 400 MW.

Moving forward, Puno said First Gen is also optimistic about its natural gas business following the takeover of tycoon Enrique Razon Jr.’s Prime Infrastructure Capital Inc.

In July, the parties signed a share purchase agreement for the sale of 60 percent of First Gen’s gas assets to Prime Infra for P50 billion.

Proceeds from this deal, subject to approval by the Philippine Competition Commission, are expected to ignite First Gen’s aggressive push into renewables.