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EDC and Alterra Power sign JV agreement for projects in Chile and Peru

Magma Energy Maule drill site, Chile (source: Magma Energy)
Alexander Richter 21 May 2013

Energy Development Corp. (EDC) and Canadian Alterra Power Corp. have signed a joint-venture agreement for the joint development of four geothermal concession areas in Chile and Peru.

Announced yesterday, Energy Development Corp. (EDC) and Canadian Alterra Power Corp. have signed a joint-venture agreement for the joint development of four geothermal concession areas in Chile and Peru. Both companies have beeng working on that agreement for some time as reported here previously, so it is great to see it see the light of day.

The JV agreement covers the Mariposa project in Chile and three other prospective blocks in Peru: Tutupaca, Loriscota and Crucero.

“The agreement sets the framework and main commercial principles for EDC’s potential acquisition of a 70-percent interest in each of the four projects. Completion of the transaction remains subject to the preparation of fully termed documentation and necessary regulatory approvals,” the Lopez affiliate explained.

The plan is for EDC to “farm in” the project by providing the necessary investments to proceed with the drilling activities. It may be a no-premium deal, which means that EDC need not pay a premium or upfront cost, Tantoco said.

As early as October last year, EDC already expressed its interest in Alterra Power’s geothermal concessions. Later, an agreement was signed, giving EDC the “exclusive right to conduct exploration and due diligence, and the sole option to advance the projects to joint venture stage.”

At present, EDC is ramping up its exploration activities here and abroad as it targets to add up to 1,200 MW to its existing portfolio within the next decade. Half of this projected capacity is expected to come from its overseas interests, particularly in Chile, Peru, Indonesia and possibly Kenya.

EDC has earmarked only P100 million ($2 million) this year for initial exploration activities. But it also allotted $40 million for the drilling of geothermal wells in Latin America, primarily at the Mariposa concession in Chile, Tantoco earlier disclosed.

Source: Business Inquirer