EDC in talks about turnkey contract for 50MW Tanawon geothermal power plant

Alexander Richter 21 Jun 2009

Reported locally, “Energy Development Corporation (EDC) is in talks with various groups for the turnkey contract of its Tanawon geothermal power project designed for 50-megawatt (MW) capacity.

Sources from the company said there are various groups eyeing to corner the project’s engineering, procurement and construction (EPC) contract, including some Japanese firms. The proposed power facility in Sorsogon is expected coming on stream by 2012. Construction of the project will proceed upon the award of the turnkey contract.

For what it plans as organic growth in its generation portfolio, the company is lining projects that include the 20-MW Nasulo geothermal facility by 2011; 50-MW Mindanao III project by 2013; 40-MW Kayabon and 40-MW Dauin by 2014; and the 60-MW Southern Leyte project by 2019.

“The individual expansion projects are presently in varying stages of development,” the company noted.

Apart from project expansions, EDC is also priming itself in joining the auctions for the geothermal assets being divested by the Power Sector Assets and Liabilities Management Corporation.It is currently in the roll of prospective bidders for the 192.5-MW Palinpinon and 112-MW Tongonan geothermal package.

To fund propounded capacity expansion, the Lopez-controlled firm already set inroads for cash build-up strategies. It noted that portfolio growth financing will not rely solely “on additional borrowings because debt capital markets can tighten and have tightened in the very recent past.”

EDC’s borrowing leverage is estimated to be between US$600 million to US$800 million, big enough to accommodate cash infusion for its pipelined expansion projects.

“As a prudent measure that provides flexibility going forward, increasing EDC’s authorized capital stock opens up another avenue for fund-raising,” the company has indicated in a previous statement.”

Source: Manila Bulletin (Philippines)