GREEN CORE Geothermal Inc. (GCGI), a wholly owned subsidiary of Energy Development Corp. (EDC), is borrowing money from local banks to repay maturing obligations.
EDC said on Monday that GCGI has completed the execution of separate loan agreements with Asia United Bank Corp., Bank of the Philippine Islands, BDO Unibank Inc., Development Bank of the Philippines, Land Bank of the Philippines, Rizal Commercial Banking Corp., Robinsons Bank Corp. and Union Bank of the Philippines for the total amount of P8.5 billion.
“The P8.5 billion will be used for the repayment of the EDC bond maturity of the same amount in June,” said EDC Vice President for Finance Erwin Avante in a text message when asked for details.
BDO Capital and Investment Corp. acted as sole arranger.
GCGI owns and operates the 112.5-megawatt (MW) Tongonan and 192.5-MW Palinpinon geothermal power plants. EDC is the largest producer of geothermal energy in the Philippines, accounting for 62 percent of the country’s installed geothermal capacity.
GCGI supplies power to electric cooperatives in Negros, such as Capiz Electric Cooperative Inc. (Capelco) and Negros Oriental II Electric Cooperative.
Its power-supply agreement (PSA) with Capelco was extended until December 2040. Based on the amended PSA, GCGI reduced its price in 2015 by approximately P0.30 per kilowatt-hour (kWh), which will allow Capelco to save for its member-consumers P140 million annually in generation charges.
“With power supply in Panay coming from imported fossil-fuel based sources, GCGI effectively helps Capelco minimize their risk from unpredictable foreign-exchange rate fluctuations and volatile global fuel price movements. This is a major benefit for Capelco granted that, historically, coal-price movements have swung wildly,” GCGI President Richard Tantoco had said.
GCGI also amended its PSA with Noreco II for a P0.45 per kWh power-rate reduction until December 2035.