SEC approves EDC plan to issue P15 billion green bonds

MANILA, Philippines — The Securities and Exchange Commission (SEC) has approved the plan of Lopez-led Energy Development Corp. (EDC) to offer up to P15 billion worth of fixed-rate ASEAN green bonds.

The bonds will be issued in one or more tranches within three years, subject to certain remaining requirements.

Proceeds from the green bonds will be exclusively applied to finance or refinance new and/or existing eligible green projects.

Eligible green projects include those for renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, clean transportation, climate change adaptation and green buildings.

For the first tranche, EDC will offer up to P3 billion in  three-year bonds due in 2024 and five-year bonds due in 2026, with an oversubscription option of up to P2 billion.

The company expects to net up to P4.93 billion from the offer, assuming the oversubscription option is fully exercised.

In particular, EDC will use the proceeds to fund geothermal growth and maintenance capital expenditure projects, including a portion of the capex for its Palayan Bayan Binary Project, Mindanao III Binary Project, and other geothermal capex for natural catastrophe resiliency, powerplant equipment upgrades, spare parts replacements and other capex projects.

For this year, the company has earmarked $280 million in capital expenditures for the development of its binary growth projects.

The 29-megawatt Palayan Binary Plant, which has an estimated cost of P6.4 billion, and is targeted to be completed in 2022, will boost the overall power generation capacity of the existing Bacman Geothermal power plant – the 120-MW Bacman I and 20-MW Bacman II.

The company is also constructing the 3.6-MW Mindanao 3 binary plant with target completion in the first half of 2022. This expands the 52.3-MW Mindanao I and 50.93-MW Mindanao II geothermal power plants in Mt. Apo.

The bonds will be offered at face value, and will be listed and traded on the Philippine Dealing & Exchange Corp.

The company tapped BDO Capital & Investment Corp. and BPI Capital Corp. as joint issue managers, joint lead The underwriters, and joint bookrunners for the offering. SB Capital Investment Corp. will serve as co-lead underwriter.

EDC is a globally renowned geothermal company operating 12 geothermal power plants which have a combined installed capacity of 1,204.67 MW, making it the largest vertically integrated geothermal power producer in the world.

Its other existing projects include the 150-MW Burgos wind farm, the 6.8-MW Burgos Solar plant, the 5.17-MW EDC Siklab solar plant, the 120-MW Pantabangan hydropower plant, and the 12.5-MW Masiway hydropower plant, for a total of 1,499.14 MW capacity.