P15B proceeds from ‘green bond’ issuance to fund EDC expansion projects

Published June 15, 2021, 3:38 PM

by Myrna M. Velasco

The targeted P15 billion proceeds from the ASEAN green bonds issuance of Energy Development Corporation (EDC) will bankroll the expansion projects being lined up by the company.

The shelf registration of EDC’s green bond issuance had already secured the approval of the Securities and Exchange Commission (SEC). On the initial tranche, it was permitted to sell P3.0 billion with an oversubscription option of P2.0 billion; and the offer period is from June 14-18 this year.

Richard B. Tantoco, president and COO of EDC, said “our maiden green bonds will enable us to expand our 100-percent clean energy portfolio, which is crucial to decarbonizing our country’s growing economy.”

One of the firm’s projects already advancing to construction phase is its P7.0 billion Palayan binary geothermal power plant that will add 29 megawatts of capacity to its existing 130MW Bacon-Manito geothermal facility in the Bicol region.

Tantoco emphasized the cash to be raised from the green bond issue “will fund our geothermal expansion projects and maintenance capital expenditure projects so that we can meet the baseload or 24/7 power needs of customers.”

The Lopez-led firm earmarked US$280 million worth of capex this year – and that will also finance the blueprinted 3.6MW Mindanao 3 geothermal expansion venture.

Apart from the geothermal projects, EDC is similarly programming the implementation of several run-of-river hydropower ventures, although these are still hobbled by ‘movement restrictions’ posed by the Covid-19 pandemic.

Onward, the company is looking at pursuing earlier investment plans in Indonesia and Taiwan; while also continuing with pre-development activities on geothermal concessions in Indonesia, Chile and Peru.

According to EDC, the first tranche of its green bonds has been rated PRS Aaa, with a “stable outlook” by the Philippine Rating Services Corporation (PhilRatings). This also serves as the first SEC-registered peso ASEAN green bond issuance by a power company in the Philippines.

The green bonds, EDC noted, had been priced at the lowest end of the range of 2.8565% for those with 3-year tenor; and 3.7305% for those in the 5-year series.

Tapped as joint issue managers and joint lead underwriters and bookrunners had been BDO Capital and BPI Capital; while engaged as co-lead underwriter for the transaction had been SB Capital.

EDC is the country’s biggest renewable energy (RE) developer with an aggregate portfolio of 1,480 megawatts that are all leaning on clean energy technologies. ###