EDC eyed as world’s top provider of renewable geothermal energy

The Energy Development Corp. (EDC) is eyeing to be the world’s leading renewable geothermal energy provider, a notch higher than its No. 2 position now.
This was bared by Paul A. Aquino, EDC president and chief executive officer, during an investors’ briefing in Davao City recently in connection with the firm’s offering of P12-bllion worth of fixed-rate bonds.
Aquino said the company is among the handful of Filipino companies exporting their geothermal technology expertise. The Philippines is reputed to be the biggest consumer of geothermal energy in the world. It is likewise the model for alternative energy provision for developing countries.
In the bond offer,  officials of the EDC and its partner companies, assured would-be investors that their money would be in good hands as the 5.5-year bonds, or those ending by June 4, 2015, would earn 8.64%, while the seven-year bonds ending December 4, 2016 would earn 9.33%.
Tapping the BPI Capital Corp. for the offer, the company first sought a P6-billion worth of bonds with the target of increasing subscription by P4 billion. However, the firm decided to increase the bond worth because of strong investment demand, a company statement said.
Part of the net proceeds from the bond offer, about P11.88 billion, would be used to partially pay its maturing 22-billion yen Miyazawa II loan, a package payable on June 26 and December 26, 2010 with a rate of 2.37% annually.
During the briefing, company officials expressed hope that the company could hit the target as it even oversubscribed by two-and-a-half times its P7.5 billion worth of fixed-rate bonds it offered last June.
“We are one of the very, very few companies that export the technology,” Aquino said in a huddle after the presentation of the bond offer.                                                                                                                                 
At present, he said, the company is positioning itself in other countries that need its expertise, including Chile, Kenya, India and Iran.
Although it wanted to enter Indonesia because it has the potential of becoming the “biggest producer of geothermal energy due to its dead volcanoes,” Aquino said the company is cautious because policies of that country have been changing from time to time.
He explained that the company wants to invest in a country where policies are not stable because of the danger that the investor faces when the policies are changed. The company is looking at tapping about 20,000 megawatt of geothermal power in Indonesia, a company press statement.
The company, 60% of it is controlled by the First Gen Corp. of the Lopez family, produces about 1,199 megawatts of geothermal energy annually and is the second producer of geothermal energy in the world, next only to multinational Chevron which produces 1,273 megawatt of geothermal energy annually.
Part of the geothermal energy that it generates comes from the geothermal power plant in Mount Apo, the highest peak located at the boundaries of North Cotabato and Davao Region.
Acquired from the government during the privatization of the Philippine National Oil Co.-Energy Development Corp, the company is also bidding for the acquisition of three government-operated geothermal power plant with a combined generation capacity of 455.5 megawatts.
On its own, the company is also developing another 600 megawatts of geothermal energy “over the next decade,” its press statement said. However, Aquino said it is harder to develop smaller geothermal fields considering that the capital expenditure is bigger and the production is smaller.