LOPEZ-led Energy Development Corp. (EDC) is looking at raising P5 billion to finance the expansion of its geothermal assets to further cement its footprint in the power sector.
At the company’s stockholders’ meeting on Tuesday, EDC Vice President for Corporate Finance Erwin Avante said the P5 billion will finance the steam field component of Bacon-Monito (BacMan) geothermal power plants in Bicol. The existing power facility consists of Unit 1, 120 megawatts (MW) and Unit 2, 20 MW.
“The P5 billion that we’re looking at is needed to finance the steam field part of our geothermal growth which includes BacMan 3, 4 and Mindanao 3. For the power-plant component, it depends on the size of the megawatt but, ideally, we will finance those on 70-percent debt basis,” Avante said.
EDC plans to put up three more units. The plan, for now, is to construct Unit3, with a capacity of 30 MW. Unit 4, Avante added, could generate a capacity anywhere between 17 MW and 20 MW. Construction for Unit 4 is seen next year.
EDC President Richard Tantoco said a Notice to Proceed for the construction of BacMan Unit 3 will be issued to its preferred contractor within the third quarter of this year.
There is also a plan to construct a fifth BacMan unit in the latter part of 2016 or early 2017.
“We are looking at a larger capacity for BacMan 4 and much bigger for BacMan 5. We will start BacMan 3 this year,” Avante said.
Mindanao 3, meanwhile, is part of the geothermal power complex in North Cotabato. EDC plans to generate 50 MW of capacity from Unit 3.
EDC is the largest producer of geothermal energy in the Philippines. For this year, the company expects a “modest jump” in its revenue from P30.9 billion registered in 2014. “For our net income, it could be flat or slightly up, depending on how we manage the costs,” Avante said.
EDC’s recurring net income stood at P9.2 billion last year. When pressed for target numbers, Tantoco said this year’s net income could be “Probably better but modest.” “It could be a muted year,” he added.
EDC is now realizing the benefits from investments made for the BacMan plant rehabilitation works, the 150-MW Burgos wind power and the 49.4-MW Nasulo geothermal projects.
Last year the Bacman plant accounted for more than half of the revenue increase with a P2.8-billion contribution. Revenue from the Nasulo power plant in Negros Oriental stood at P700 million and P200 million from the Burgos wind farm.
“For full-year 2015 revenues for Burgos would be less than P2 billion. Assuming unforeseen events, BacMan revenues could hit P4.5 billion,” Avante added.