EDC completes payment of US$124m for Palinpinon and Tongonan plants

Alexander Richter 18 Dec 2009

Green Core Geothermal Inc., a wholly-owned subsidiary of Energy Development Corporation, has completed its US$124 million payment to the PSALM Corporation for the acquisition of the Palinpinon and Tongonan geothermal plants.

According to a recent statemenet, “Green Core Geothermal Inc. (CCGI), a wholly-owned subsidiary of Energy Development Corporation, has completed its P5.801 billion payment to the Power Sector Assets and Liabilities Management Corporation (PSALM) for the acquisition of the 192.5-megawatt Palinpinon and 112.5-MW Tongonan geothermal plants.

In a disclosure to the Philippine Stock Exchange (PSE), listed firm EDC indicated that it “remitted to PSALM before the close of business of December 15, 2009 a total of P5,801,495,437.98 representing the peso equivalent of the outstanding principal and accrued interest of the loan”, referring to the financing offered by PSALM to asset buyers.

The Lopez-controlled firm said it formally requested PSALM “to accept the proposed accelerated prepayment of the balance of the purchase price for the Palinpinon and Tongonan power plants.”

The prepayment schedule should have been slated December 29, 2009, but the company opted to settle it in advance to December 15, and it has “elected to settle in peso” denomination.

The PSALM Board was reported to have recently ratified the waiver of the 20-day prepayment notification period, in response to EDC’s request.

The Palinpinon-Tongonan acquisition was among those strategically eyed by the company as part of its portfolio build-up as a leading renewable energy company in the country.

The facilities were formally turned over to the buyer around October this year, following GCGI’s remittance of the required upfront payment to PSALM.

To enhance the facilities’ efficiency, the company noted that it will initially pursue upgrade and rehabilitation of such acquisitions so they may also help plug supply gap in the Visayas.

Apart from the acquisitions it has been eyeing with PSALM, EDC is also setting its eyes on greenfield projects that will further increase its total generating capacity.

While geothermal is the area where it can clearly claim expertise on, the Lopez firm is also taking foray into other RE resource development, such as wind.”

Source: Manila Bulletin Publishing Corp.