EDC borrows P5 B for capex

MANILA, Philippines - Lopez-led Energy Development Corp. (EDC) has borrowed P5 billion from Union Bank of the Philippines to finance its capital spending this year.

EDC disclosed yesterday it executed a loan agreement with UnionBank for the total amount of P5 billion.

The amount loaned will help augment the company’s cash requirements this year, EDC vice president for corporate finance Erwin Avante said in a text message.

“We have a big capex of around P14 billion, debt service of around P11 billion,” he said.

Last March, EDC announced it has set P14 billion in capital expenditures this year, higher compared to the P10-12 billion earmarked in 2015.

The capex is focused on increasing the reliability of its aging facilities, such as the 3x112.5-megawatt (MW) Tongonan geothermal plant and the 125-MW Upper Mahiao goethermal plant.

The firm has already ordered parts for the Tongonan plant from Mitsibushi and new motors for the Upper Mahiao plant from GE.

Part of the capex will also be spent on drilling projects.

The borrowing will also be used to refinance a maturing loan this year, EDC CFO Nestor Vasay said in another text message.

Issued in 2009, EDC’s P3.5-billion retail bond will mature this year. The capital raising activity was used to partly finance outstanding loans, projects and other general corporate purposes.