First Gen lowers 2025 capex to P35 billion

By Sheldeen Joy Talavera, Reporter

LOPEZ-LED First Gen Corp. is allocating a lower capital expenditure (capex) budget for next year as it will be focusing on geothermal activities, its president said.

“Next year, we will have a relatively smaller capex program. Maybe roughly around…P35 billion,” First Gen President and Chief Operating Officer Francis Giles B. Puno told BusinessWorld last week.

Mr. Puno said that around 90% of the budget will be allocated for geothermal activities, particularly drilling new wells.

“The prioritization is those drilling programs and the completion of the power plants… 83 megawatts (MW) will be operational by next year,” he said.

For 2024, First Gen has allocated $1.27 billion or approximately P74.4 billion.

Of the total, $560 million was for the hydro platform, which included the acquisition cost of the Casecnan Hydroelectric Power Plant; $670 million was allotted to its renewable energy subsidiary Energy Development Corp. (EDC) for its renewable energy portfolio; and the remainder was allocated for natural gas projects and the LNG Terminal Project.

Mr. Puno said that the company has already “completed the capex program in gas, as well as in hydro,” which explains the lower 2025 budget.

“The capex for geothermal is ongoing. So, what we’re doing is completing all the capex programs for geothermal,” he said.

For 2025, First Gen is targeting to drill approximately 16 new wells.

“We’re spending a lot on our well-drilling program. But the other issue we’re facing is that the power plants above ground are already old. So, we’re also trying to figure out how to make sure that we’re maximizing the steam capability of our concessions — matched with the right technology,” Mr. Puno said.

He said that the company has set a P60-billion capex program, of which P30 billion is for drilling wells while another P30 billion is for building more geothermal plants, as well as battery energy storage facilities.

“Many of our investments were originally fossil fuel, particularly in gas. We never invested in coal. But over the last many years, our priority really has been in geothermal,” Mr. Puno said.

“When you look at our balance sheet, for the longest time, our gas assets were probably the bigger portion of our investments, but today, our biggest investment actually is in EDC,” he added.

First Gen has a total of 3,668 MW of installed capacity coming from its portfolio of plants that run on geothermal, wind, hydro, solar energy, and natural gas.

At the local bourse on Monday, shares in the company climbed by 1.3% to close at P17.20 each.