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EDC to provide downpayment for Palinpinon and Tongonan plants

Alexander Richter 19 Oct 2009

Energy Development Corp. to pay the Philippine Power Sector Assets and Liabilities Management Corp. $80 million, representing EDC’s downpayment for the acquisition of the Palinpinon and Tongonan geothermal power plants.

Reported from the Philippines, “Energy Development Corp. (EDC) targets to pay on Friday state-run Power Sector Assets and Liabilities Management Corp. $80 million, representing EDC’s downpayment for the acquisition of the 192.5-megawatt (MW) Palinpinon and 112.5-MW Tongonan geothermal power plants.

The payment will enable EDC, the country’s largest producer of geothermal energy, to take over the two power facilities and fast track the rehabilitation of the plants, said Marcelino M. Tongo, EDC vice president for operations.

At the company’s investors briefing last week, Tongco said the Lopez-led firm was “expediting the turnover of the plants to maximize the benefits of the steam sales” since the company was also supplying steam to the Palinpinon and Tongonan geothermal power plants.

Through Green Core Geothermal Inc., EDC submitted in September the highest bid of $220 million for the Palinpinon and Tongonan power plants, edging out the $200-million bid of the Aboitizes’ wholly owned subsidiary, Therma Power Visayas Inc.

Green Core is a subsidiary of First Luzon Geothermal Energy Corp., which is wholly owned by EDC.

Since EDC has already funds for the 40-percent downpayment, EDC president and COO Richard B. Tantoco said they would tap the 60 percent staple financing of PSALM.

Under the financing scheme, winning bidders for state-owned power plants are allowed to defer payment for 60 percent of their offers. The amount will be amortized in fixed and equal semi-annual payments for up to seven years, with fixed interest rates.

Green Core plans to begin the rehabilitation of the geothermal power plants as soon as these are turned over to the company. It targets to make them run at their full capacities.”

Source: Inquirer