Energy Development to invest in geothermal and wind power projects

Energy Development Corp., the country’s largest geothermal company, may spend about P67 billion to build new and rehabilitate power plants this year until 2016, president Richard Tantoco said Thursday.

Tantoco told reporters that Energy Development or EDC, an affiliate of First Gen Corp., would need around $1.037 billion (P45.98 billion) to invest in “greenfield” or new geothermal projects and P20.6 billion to rehabilitate its existing power stations.

Tantoco said geothermal projects would comprise the bulk of the investments in new projects that will generate 230 megawatts of electricity. The company will spend around $805 million for the geothermal projects at $3.5 million per MW.

Energy Development will spend about $232 million for an 86-MW wind energy project at a cost of $2.5 million to $2.7 million per MW.

“The expansion will be funded 30-percent equity and 70-percent debt,” Tantoco said.

He said the P20.6-billion investment would be divided into P12.2 billion for steam field development and P8.4 billion for rehabilitation.

Energy Development plans to increase its capacity to 1,542 MW from 1,116 MW over a five-year period starting 2011.

The company plans to put 150-MW Bacman geothermal plant and the 86-MW wind farm in Burgos, Ilocos Norte on stream by 2012 and the 40-MW Tanawon and 20-MW Nasulo geothermal by 2013.

It will also put the 50-MW Mindanao 3 geothermal project in operation by 2014, the 40-MW Rangas in 2015 and the 40-MW Kayabon in 2015.

Energy Development, which allotted a capital expenditure of P7 billion this year, has available cash of P6 billion to finance the capital expenditure.

“There is no need for fund raising this year. If the Burgos project moves, we might raise probably $100 million to finance that,” Tantoco said.

The company expects net income to reach close to P8.7 billion this year on higher electricity sales and acquisitions.

“We are now in a position to decisively move on to our organic expansion after successfully acquiring all National Power Corp. assets we targeted. We will be drilling in the Tanawon field of the Bacman concession by September,” he said.

“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,” Tantoco said.

Energy Development’s steamfield and power plant operations are now fully integrated with the 112.5-MW Tongonan 1, 192.5 MW-Palinpinon and 150-MW Bacman geothermal plants acquired from Napocor.

The new assets boosted the company’s power portfolio by 88 percent to 561 MW. The company now has 1,199 MW in power generation assets in addition to the 1,199 MW installed steamfield capacity.

By Alena Mae S. Flores,