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Philippines: Lopez group (EDC) plans to expand abroad

Bacon-Manito geothermal field, Philippines (source: EDC)
Alexander Richter 2 Jun 2010

The Lopez group (EDC, First Philippine Holdings) is keen on expanding its geothermal investments abroad this year to avoid breaching the generation cap set by legislation in the Philippines.

Reported from Manila, Philippines, “The Lopez Group said it is keen to expand its geothermal investments abroad this year to avoid breaching the generation cap set by the Electric Power Industry  Reform Act (Epira).

Oscar Lopez, First Philippine Holdings Corp. Chairman, says “We have to go abroad because we have a limited 25-percent cap [under the law]. We cannot exceed that,” Lopez said.

Under EPIRA, a company or a related group is prohibited to own, operate or control more than 30 percent of the installed generating capacity of a grid and/or 25 percent of the national installed generating capacity. This is done to prevent monopoly and market power abuse and to promote competition among industry players.

Lopez said the group would partner with a foreign company to be able to venture overseas.

First Holdings has interests in power generation, through First Gen Corp., and distribution, through Manila Electric Co. and Panay Electric Co. First Gen holds 40 percent of Energy Development Corp. (EDC), the largest geothermal energy producer in the country.

EDC owns and operates the Unified Leyte plants, which consists of the 125-megawatt Upper Mahiao, 180-megawatt Mahanagdong, 232-megawatt Malitbog and 51-megawatt optimization plants. It also has the 52-megawatt Mindanao 1 and 54-megawatt Mindanao 2 power plants in North Cotabato.

This year, EDC is adding the 150-megawatt Bacon-Manito (BacMan) geothermal plant in Sorsogon to its portfolio of power generation assets after bagging the plant for of $28.25 million.

The company allotted P8.6 billion in capital expenditure this year to expand its geothermal capacity. Its earnings rose to P3.80 billion during the first three months from P2.27 billion in the same period in 2009.

FPHC shares climbed to P56.5 on Friday from Thursday’s P55.5 while EDC shares rose to P4.95 from P4.85 each.”

Source: Manila Times via iStockAnalyst