PNOC eyes $120-M loan from JBIC for Leyte project

PNOC-Energy Development Corp. (EDC) will tap the Japan Bank for International Cooperation (JBIC) for a $120-million loan to finance the company’s Southern Leyte geothermal development project.

EDC chairman and president Sergio Apostol said the $120-million loan will form part of their borrowing requirements for 2004.

Apostol said the loan processing will take at least one to two years. "We have already submitted papers to the National Economic and Development Authority (NEDA) three to four months ago. Then it will go to the Japanese Embassy and then to JBIC and back to the National Government," he said.

The loan, he said, will be used to put up a 60-megawatt (MW) geothermal steamfield and a power plant in San Juan, Leyte.

The company needs $1 million for every MW of steamfield development and another $1 million per MW for the construction of the power plant.

He said the construction of the two projects will take at least four years, coinciding with the putting up of the Leyte-Cebu Interconnection project of the National Transmission Corp. (Transco).

"The project that will be generated from the new power plant will be sold to Bohol. It can fill up the 60 MW need of the province. What we can produce then will be transferred to Manila or Cebu," Apostol said.

For 2004, Apostol said they expect to post an income of P1 billion, slightly higher than the P900-million projected earnings in 2003. The higher income projection for next year, he said, can be attributed to the increased businesses of EDC here and abroad.

He said they have adjusted their income target for the year due to the deterioration of the peso against the US dollar. Earlier, EDC projected its 2003 income to hit P1.1 billion this year.

As this developed, Apostol said they expect to sign with Japanese from Kanematsu this week the contract for the 20-MW Palinpinon optimization project located in Nasuji, Negros Oriental.

He said a P1.4-billion loan from the Development Bank of the Philippines (DBP) was already released.

The construction of the power plant will begin in June 2004 and commercial operations will start on Dec. 2005. "With this Palinpinon optimization project and the 40-MW Northern Negros Geothermal Project which will also be commissioned in 2005, we are optimistic that we can directly help alleviate the projected shortfall in power generation in the Visayas region by 2005," Apostol said.

Aside from Palinpinon, EDC is also working on the optimization of another 20-MW in the Mindanao geothermal project in North Cotabato and 40-MW in Tanawon, Sorsogon.

EDC remains at the forefront of geothermal energy development in the country with an installed generating capacity of 1,149 MW spread over geothermal steamfields in Leyte, Negros Oriental, Bicol and North Cotabato. This represents about 60 percent of the country’s total geothermal capacity.