KfW Ipex-Bank is financing a US$265mn loan for the construction of the state-of-the-art power plant, San Gabriel, in the Philippines.

The investor and borrower is a wholly-owned subsidiary of First Gen Corporation, one of the largest power generation companies in the Philippines. The financing is covered by an export credit guarantee from Euler Hermes and has a tenor of about 14 years.

The San Gabriel power plant, located in Batangas City, will be a 414MW combined cycle gas-fired plant and will use German technology from Siemens to facilitate lower CO² energy production at optimal efficiency.

The highly-productive plant, with an efficiency level of over 60%, will utilise equipment and parts supplied by the German company Siemens through the equipment supply contract. Its Philippine subsidiary, Siemens Inc., will act as general construction contractor of the plant while another subsidiary, Siemens Power Operations, Inc., will serve as operator.

Commenting on the completion of the financing deal, Markus Scheer, a member of the KfW Ipex-Bank management board, says: “This project is an example of successful exporting of German high technology with added value: after completion, San Gabriel will be the most efficient combined cycle gas-fired power plant not only in the Philippines but in the rest of Southeast Asia, a real showcase project for the energy market in the whole region. Thus, key German technologies are helping to relieve the burden on the environment.”

San Gabriel is being built in Batangas City on the island of Luzon, approximately 112 kilometres south of the capital, Manila. A top-of-the-line SGT6-8000H gas turbine from Siemens is at the heart of the plant. It will ensure optimal efficiency and produce low CO² emissions while maintaining high operational flexibility. Commissioning is scheduled for March 2016.

In the past, KfW financed at the site the construction of the 500MW San Lorenzo and 1000MW Santa Rita combined cycle gas-fired power plants. These plants can now play a role in relieving the strain on the environment during the building phase of the new plant, as San Gabriel will be able to optimise the use of equipment of the other two power plants’ existing infrastructure.