Firm allocates P67B for renewable energy program

ENERGY Development Corporation (EDC), the renewable energy arm of the Lopez group, is earmarking about P67 billion for its expansion plans for 2010 to 2015.

Richard Tantoco, EDC president, said the company would need to raise US$ 1.037 billion (P45.98 billion) for investments in "greenfield" or new geothermal projects and P20.6 billion for the rehabilitation of its existing power plants.

Updates on President Benigno Aquino III's presidency

He said that for greenfield geothermal projects, they are targeting some 230 MW capacity or an investment of US$ 805 billion for the geothermal projects at US$ 3.5 million per MW.

On their wind project, EDC would require US$ 232 million for its 86 MW wind project at a cost of US$ 2.5 million to US$ 2.7 million per MW.

He said they also need to raise about US$ 100 million through borrowing this year to finance its equity in the Burgos wind project in Ilocos Norte.

Tantoco related that only 30 percent of the entire expenditure for expansion would be through borrowings and the 70 percent would be raised through project financing.

The EDC official said the P20.6 billion investment is divided into below ground (for steam field development) costing P12.2 billion and P8.4 billion for above ground (investments in existing power generation facilities).

Tantoco noted that the expansion plans are in line with the company's goal to jack up its capacity over time.

He said they plan to increase their capacity to 1,542 MW from 1,116 MW over a five-year period starting 2011.

In its capacity enhancement program, EDC would be putting up the 150 MW Bacman geothermal plant and the 86 MW wind farm in Burgos, Ilocos Norte in 2012; 40 MW Tanawon and 20 MW Nasulo geothermal projects in 2013; 50 MW Mindanao 3 geothermal project in 2014; 40 MW Rangas geothermal project in 2015; and 40 MW Kayabon geothermal project in 2015.

This year, EDC is setting aside capex budget of P7 billion which will be financed through internally generated funds since they have healthy cash position this time.

"There is no need for fund raising this year. If the Burgos project moves, we might raise probably $100 million to finance that," Tantoco said.

EDC is expecting P8.7 billion to P9.1 billion net income for the year, which are same projections from market analysts.

At present, EDC has 1,199 MW in power generation assets in addition to the 1,199 MW installed steamfield capacity.

The company also owns and operates the Unified Leyte plants consisting of the 125 MW Upper Mahiao, 180 MW Mahanagdong, 232 MW Malitbog and 51 MW optimization plants. (MSN/Sunnex)