Geothermal energy firm secures $175-M loan

Manila — The Energy Development Corp., the country’s largest geothermal energy producer, closed yesterday a six-year $175-million transferable syndicated term loan facility with seven foreign banking groups.

In a disclosure to the Philippine Stock Exchange, EDC said it would use the proceeds of the loan solely to refinance the company’s existing three-year $175-million transferable syndicated term facility maturing on June 2013.

The new loan, EDC said, effectively lengthened the remaining life of the existing facility to six years from two years and has substantially lowered interest costs.

The total firm underwritten commitment received from the seven banks was in excess of $600 million, three times more than the target amount.

These seven banks were Australia and New Zealand Banking Group Ltd. (ANZ); Bank of Tokyo-Mitsubishi UFJ Ltd.; Chinatrust Commercial Bank; ING Bank N.V. Manila Branch; Maybank Group; Mizuho Corporate Banking Ltd.; and Standard Chartered Bank. ANZ acted as sole coordinator and documentation bank.

“The continued support of the existing lender group attests to their confidence in EDC’s capacity to sustain its momentum toward becoming the global leader in geothermal energy,” said Richard B. Tantoco, EDC president and COO.

EDC has a number of greenfield and expansion projects in its pipeline. Apart from the focus on its domestic growth, EDC is currently eyeing Asia and Latin America as potential regions for overseas expansion.

To fund its growth projects, capital expenditures, debt servicing requirements and other general corporate purposes, EDC successfully issued a 3.5 times oversubscribed 10-year $300 million Reg S Bonds in January of this year.

In May, the company also signed a 15-year $75-million facility with the International Finance Corp.

“This is the third successful fund-raising exercise executed by EDC in the past six months. This is a clear testament to the positive sentiment and outlook by diverse group of investors and lenders to the company,” added Nestor H. Vasay, EDC senior vice-president and CFO.

Last week, the EDC also assured assured Negros residents that it would not go beyond the 12.5-hectare buffer zone outside the Mt. Kanlaon Natural Park to access steam for its Northern Negros Geothermal Power Plant in Bago City.

“EDC’s existing area in (sitio) Pataan (in barangay Mailum, Bago City) and the 12.5 hectares in the buffer zone are sufficient to access the geothermal reservoir given current technology,” EDC assistant vice president for resource management Noel D. Salonga assured on Thursday.

Salonga said the company has developed Pataan and had used only 12.5 hectares of the 169 hectares in the buffer zone granted under the Mt. Kanlaon Natural Park Act.  /Inquirer