First Gen Corp. plans to spend some P8 billion to put up two hydroelectric power plants in Mindanao, in line with its thrust to expand its renewable energy portfolio.
In an interview, First Gen president Francis Giles Puno said the company was expected to prioritize the development of the 30-megawatt Puyo run-of-river hydroelectric power plant in Agusan del Norte and the 23-MW Bubunawan power facility in Bukidnon.
“We’ll still continue to grow the geothermal through (our affiliate) Energy Development Corp. But in the case of First Gen, what we’ll do is pursue some of these run-of-river hydroelectric power plants in Mindanao,” Puno said.
The two proposed facilities formed part of a hydropower portfolio, which will see the construction of a total of five plants that can generate about 100 MW combined. The other power projects in the pipeline are expected to be put up in Cabadbaran, Agusan Norte; and Tumalaong and Tagoloan rivers, both in Bukidnon.
Puno, however, admitted that First Gen was waiting for the issuance of feed-in-tariff (FIT) rates as these would help determine the economic viability of a renewable energy project. The application for FIT rates, however, is still under study by the Energy Regulatory Commission.
The feed-in-tariff, which refers to the guaranteed price at which RE developers will be paid for the energy that they will produce, has raised fears of further increases in the cost of electricity in the country.
“If the FIT is passed, then we can pursue (the projects). The advantage is that the tariff for run-of-river hydros is actually lower, so it’s actually quite attractive for consumers,” Puno said, referring to the P6.15-per-kilowatt-hour FIT rate being asked for hydropower generation.
First Gen is in the process of completing the preliminary engineering design for the Puyo and Bubunawan hydropower projects. It is expected to soon start looking for financing for these projects.
Among the fund-raising options being considered included tapping the debt market or issuing additional perpetual preferred shares to raise as much as P5 billion. This will follow a similar fund-raising activity held in July, when First Gen raised P10 billion.
Source: First Gen