EDC with details on its 230MW & $805m extension plans

EDC with details on its 230MW & $805m extension plans Bacon-Manito geothermal field, Philippines (source: EDC)
Alexander Richter 2 Aug 2010

EDC plans an investment of US$805m for its 230MW geothermal development plans, which corresponds to a cost per MW of US$3.5m in building the capacity.

In an actual press release, Philippines-based Energy Development Corp. (EDC, PSE:EDC), the renewable energy-arm of the Philippines’ Lopez group, provides a few more details on its planned geothermal development and investments. The company earmarks about P70 billion (US$1.53 billion) for its five-year expansion plans (2010-2015).

In a release by the company, “Richard Tantoco, EDC president and chief operating officer, said the company would need to raise US$1.037 billion for investments in “greenfield” or new geothermal projects and P20.6 billion for the rehabilitation of its existing power plants.

He said that it was looking at a possible investment of $805 million for 230 megawatt additional capacity from its greenfield geothermal projects, or at $3.5 million per MW.

EDC will spend about $232 million for its 86-MW wind project at a cost of $2.5 million to US$ 2.7 million per MW.

Tantoco said the EDC also needs to raise about $100 million through borrowing this year to finance its equity in the Burgos wind project in Ilocos Norte.

Tantoco said that only 30 per cent of the entire expenditure for expansion would be through borrowings and the 70 per cent through project financing.

The EDC official said the P20.6-billion investment is divided into below ground (for steam field development) costing P12.2 billion and P8.4 billion for above ground (investments in existing power generation facilities).

Tantoco said that the expansion plans were in line with the company’s goal to jack up its capacity over time.

He said the company planned to increase its generating capacity to 1,542 MW from 1,116 MW over a five-year period starting 2011.

In its capacity enhancement program, EDC would be putting up the 150 MW Bacman geothermal plant and the 86 MW wind farm in Burgos, Ilocos Norte in 2012; 40 MW Tanawon and 20 MW Nasulo geothermal projects in 2013; 50 MW Mindanao 3 geothermal project in 2014; 40 MW Rangas geothermal project in 2015; and 40 MW Kayabon geothermal project in 2015.

This year EDC is setting aside capital expenditure of P7 billion, which will be financed through internally generated funds.

EDC is expecting P8.7 billion to P9.1 billion net income for the year, which are same projections from market analysts.

“The company targets its net income to reach close to P8.7 billion for the year due to higher electricity sales and definitely from our acquisitions. We are headed towards that (P8.7 billion). Close to that,” Tantoco said when asked about the company’s net income guidance.

“We are now in a position to decisively move on to our organic expansion after successfully acquiring all the National Power Corp. assets we targeted. We will be drilling in the Tanawon field of the Bacman concession by September. By July 2011, we will have a total of four rigs in Tanawon and one in Mindanao all working to deliver the fuel supply for our growth projects,” he said.

EDC’s steamfield and power plant operations are now fully integrated with the company’s acquisition of the 112.5 MW Tongonan 1, 192.5 MW Palinpinon and 150 MW Bacman geothermal plants from Napocor and the turnover of the 106 MW Mindanao plants by its build-operate-transfer partner.

At present, EDC has 1,199 MW in power generation assets in addition to the 1,199 MW installed steam field capacity.

The company also owns and operates the Unified Leyte plants consisting of the 125 MW Upper Mahiao, 180 MW Mahanagdong, 232 MW Malitbog and 51 MW optimization plants.”

Source: company release via Trading Markets