By Myrna M. Velasco
Listed firm Energy Development Corporation (EDC) will be securing P11.5 billion worth of fresh loans from local banks to refinance $80-million club loan for its Burgos wind venture; and to partly fund ongoing projects.
The company, in a disclosure to the Philippine Stock Exchange (PSE), has noted that it secured the go-signal of its Board “for a three-year bilateral loan facilities,” for such targeted purposes.
Beyond debt refinancing, the company added that it shall also be using fraction of the amount for capital expenditures (capex) and other “general corporate purposes.”
The company has not specified which projects it will be advancing – but it previously indicated plans of continuing renewable energy investments – in the wind, solar, hydro and geothermal sectors.
The $80-million club loan was secured in 2013 as a supplement to project funding for its 150-megawatt Burgos wind farm venture being pushed into implementation at that time.
The wind farm venture had a loan component of $300 million, and it was the main cash-raising activity of the power segment of the Lopez conglomerate then.
EDC had been among the “brave soul” investors that took its chance in the initial wave of wind project developments that had been incentivized with feed-in-tariff (FIT).
Providentially, the company had triumphed in that race – hence, the capacity of its wind plant had been among the first ones qualifying for FIT perks.
The Burgos wind project’s FIT rate of P8.53 per kilowatt-hour (kWh) will stretch for 20 years – from its certified project completion in November 2014.
The company had tapped Danish firm Vestas for the full-turn key contract for the project; and it was the first to come on stream among FIT-backed wind project developments in the country.
The facility’s initial hurdle had just been on transmission of its capacity but that has been resolved a year after – with the backing of both government and the push on the uprating of the facility of the National Grid Corporation of the Philippines.