ENERGY Development Corp. (EDC) targets to close debt financing for its planned 150-megawatt (MW) wind power project in Ilocos Norte this year, officials of the Lopez-led company said last week.
“We’ve already started working on project financing for the Burgos wind project. The total project cost is $450 million for the 150-MW project,” said Nestor H. Vasay, EDC’s senior vice-president and chief financial officer, at the sidelines of the company’s annual stockholders’ meeting in Makati City.
Mr. Vasay said project financing will have a 70-30 debt-equity structure.
Erwin O. Avante, the company’s vice-president for corporate finance, said EDC will be securing debt financing worth some $315 million by the fourth quarter.
“We’re raising $315 million via loan for the wind project. It will be partly dollar, partly peso,” Mr. Avante said.
“We expect to close project financing within the year, by the fourth quarter.”
From the original 87-MW design, EDC now plans to operate a 150-MW wind farm in Burgos municipality.
The 87-MW segment is scheduled to be operational by the fourth quarter of this year, while the 63-MW expansion is slated to start operations in March next year.
Mr. Avante said project financing will include arrangements with an export credit agency since “equipment is coming from Denmark.”
He added that EDC will tap a bridge loan while the company is still in the process of securing regular financing for the project. “Initially, we’re getting a bridge financing for the expansion, but the long-term solution which we expect to close this year is the $315 million,” Mr. Avante said.
He explained that bridge financing will allow the company to meet funding requirement for the 63-MW portion of the project by providing immediate cash flow. “For the bridge financing, we are looking at around $150 million. This will be used to fund the 63 MW,” Mr. Avante said.
This funding — which will have a short- and medium-term segments — is expected to be closed within this semester.
EDC had earlier secured similar type of financing for the 87-MW portion of the project. “For the 87 MW, we have already secured financing for that.
That includes the P7-billion bonds last year, so as far as the 87 MW is concerned, the bridge is funded already,” he added.
“So for the expansion, we’re raising the bridge [sic] and it will come from local and foreign institutions.”
EDC is the largest producer of geothermal energy in the Philippines. It operates 12 power facilities in five geothermal service contract areas in the country.
The company, through First Gen Hydro Power Corp., also operates the 132-MW Pantabangan-Masiway hydro power plant in Nueva Ecija.
Profit of EDC plunged 47.49% to P5.628 billion last year from P10.717 billion in 2012. In the same comparative periods, revenues fell 9.56% to P25.656 billion from P28.369 billion, while expenses slipped 5.64% to P16.858 billion from P17.866 billion.
Shares of the company gained 12 centavos or 2.007% to close P6.10 apiece on Friday last week from P5.98 each on Thursday.