EDC inks deal with Aussie firm for Peru, Chile geothermal projects

MANILA, Philippines - Energy Development Corp. (EDC), the country’s largest producer of geothermal energy has forged a deal with Australian firm Hot Rock Ltd. to acquire a 70-percent interest in four geothermal concession areas in Peru and Chile.

In a disclosure to the Philippine Stock Exchange yesterday, EDC said the agreement sets the framework and commercial principles for the acquisition of the concession areas located in the volcanic regions of Calerias and Longavi in Chile and the Quellaapatcheta and Chocopata regions in Peru.

EDC said the deal is subject to the satisfaction of certain conditions which include fully termed documentation, confirmatory due diligence and necessary regulatory and governmental approvals.

Hot Rock is an international renewable energy company focused on exploration of geothermal resource for development. It is now one of the largest holders of geothermal acreage in Australia as well as holders of geothermal sites in Chile and Peru.

The Australian company earlier confirmed a geothermal resource of up to 185 megawatts of potential power generation capacity at its 100 percent-owned Calerias geothermal project. The resource area remains open with strong indications for a significant extension.

It has established its presence in Chile since 2009 and its early mover advantage has allowed the company to cherry-pick several prime tenements.

Chile, the world’s largest copper producer, has the highest power costs in South America. It has suffered power outages for several years owing to rising energy demand and drought.

On the other hand, Southern Peru offers both attractive infrastructure and electricity markets for geothermal power development. The electricity market in Peru was privatized in 1990s and demand for power has risen significantly to keep pace with the high levels of development in manufacturing and mining.

EDC is the world’s largest pure play geothermal company with a total of 1,130 MW of fully integrated geothermal plants representing 61 percent of the installed power generation capacity in the Philippines. This installed capacity is spread across seven operational steam fields located on five distinct contract areas in Leyte, Negros Oriental, Negros Occidental, Bicol and North Cotabato.

EDC’s efforts to develop geothermal as a clean, renewable and indigenous source of energy have helped propel the Philippines to become the world’s second largest producer of geothermal power.