EDC secures $175-million term loan

MANILA, Philippines - Energy Development Corp. (EDC), the renewable energy development arm of the Lopez Group, has secured a three-year, $175 million term loan facility with a foreign bank syndicate.

In a disclosure to the Philippine Stock Exchange, EDC investor relations manager and company information officer Erudito Recio said they signed a loan facility with ANZ (Australia and New Zealand Banking Group Ltd.) Manila Branch, Credit Agricole Corporate and Investment Bank, and Standard Chartered Bank as mandated lead arrangers and bookrunners.

Recio said EDC intends to use the loan proceeds to finance general corporate funding purposes as well as for refinancing and/or repayment of maturing loan obligations.

The EDC official said the loan pays an interest of LIBOR (London Interbank Offered Rate) plus a margin of 325 basis points. LIBOR is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank market).

EDC, the country’s leading producer of geothermal energy, reported robust net income figures in the first quarter of the year.

The company’s earnings increased 68 percent to P3.8 billion for the first three months of 2010 from P2.27 billion in the same period last year. 

Earnings before income tax, depreciation and amortization (EBITDA) also improved 82 percent to P4.94 billion. 

Improved revenues from its two subsidiary corporations, Green Core Geothermal Inc. (GCGI), the operator of the 192.5 MW Palinpinon and 112.5-megawatt Tongonan I geothermal power plants, and First Gen Hydro Power Corp. (FG Hydro), the operator of the Pantabangan and Masiway hydroelectric plants, were the main driver of the significant rise in net income and EBITDA for the quarter, contributing P1.22 billion.

The quarter also saw the company’s core net income – net of exceptional items – improving by P3.2 billion or 103 percent higher than the P1.6 billion posted during the same period in 2009. The marked improvement was primarily driven by the increased electricity sales from the geothermal and Pantabangan-Masiway hydroelectric plants. 

Green Core successfully took over operations of the Palinpinon and Tongonan I geothermal power plants in October last year. 

This year, EDC is adding to its portfolio of power generation assets the 150-MW Bacman geothermal plant in Sorsogon after it submitted the highest bid in the recently concluded auction for the geothermal plants. 

EDC 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, as well as the 52-MW Mindanao 1 and 54-MW Mindanao 2 power plants in North Cotabato. These plants were turned over to EDC by its partners at the end of the cooperation period.

EDC remains the largest producer of geothermal energy in the Philippines accounting for 62 percent of the total country installed geothermal capacity.

Aside from geothermal, EDC also owns and operates the 122-MW Pantabangan-Masiway hydro electric plants and has investments in wind energy projects in Ilocos and other provinces.