Geothermal Energy Plant

Geothermal energy firm secures $175-M loan

Manila — The Energy Development Corp., the country’s largest geothermal energy producer, closed yesterday a six-year $175-million transferable syndicated term loan facility with seven foreign banking groups.

In a disclosure to the Philippine Stock Exchange, EDC said it would use the proceeds of the loan solely to refinance the company’s existing three-year $175-million transferable syndicated term facility maturing on June 2013.

The new loan, EDC said, effectively lengthened the remaining life of the existing facility to six years from two years and has substantially lowered interest costs.

The total firm underwritten commitment received from the seven banks was in excess of $600 million, three times more than the target amount.

These seven banks were Australia and New Zealand Banking Group Ltd. (ANZ); Bank of Tokyo-Mitsubishi UFJ Ltd.; Chinatrust Commercial Bank; ING Bank N.V. Manila Branch; Maybank Group; Mizuho Corporate Banking Ltd.; and Standard Chartered Bank. ANZ acted as sole coordinator and documentation bank.

“The continued support of the existing lender group attests to their confidence in EDC’s capacity to sustain its momentum toward becoming the global leader in geothermal energy,” said Richard B. Tantoco, EDC president and COO.

EDC has a number of greenfield and expansion projects in its pipeline. Apart from the focus on its domestic growth, EDC is currently eyeing Asia and Latin America as potential regions for overseas expansion.

To fund its growth projects, capital expenditures, debt servicing requirements and other general corporate purposes, EDC successfully issued a 3.5 times oversubscribed 10-year $300 million Reg S Bonds in January of this year.

In May, the company also signed a 15-year $75-million facility with the International Finance Corp.

“This is the third successful fund-raising exercise executed by EDC in the past six months. This is a clear testament to the positive sentiment and outlook by diverse group of investors and lenders to the company,” added Nestor H. Vasay, EDC senior vice-president and CFO.

Last week, the EDC also assured assured Negros residents that it would not go beyond the 12.5-hectare buffer zone outside the Mt. Kanlaon Natural Park to access steam for its Northern Negros Geothermal Power Plant in Bago City.

“EDC’s existing area in (sitio) Pataan (in barangay Mailum, Bago City) and the 12.5 hectares in the buffer zone are sufficient to access the geothermal reservoir given current technology,” EDC assistant vice president for resource management Noel D. Salonga assured on Thursday.

Geothermal Energy | Ngatamariki Geothermal Power Plant, New Zealand

Construction is expected to begin on a new geothermal energy power plant north of Taupo which will add to the generation capacity of Mighty River Power. The New Zealand development will add another 82MW to the geothermal output and will be built on the Nga Tamariki geothermal steam field.

The power plant will cost around $466 million to bring online and will increase the geothermal capacity of the Mighty River Power Company to 460MW. During the peak construction phase of the project it is expected that around 400 workers will be employed.

Construction is expected to begin in July 2011 and will be operating at full capacity by mid-2013. This is after the resource consents were granted in May 2010.

While the Mighty River Power company is the owner of the new power plant it is a joint participant in the resource consent process with landowner Tauhara North No 2 Trust. The Trust will receive revenue from the project and has an option to take an equity stake in the plant.

In order to drill up to five holes at Ngatamariki, a semi-automated 31 metre high drilling rig is being shipped from Iceland. This rig has been specifically designed for geothermal development and has never been used in the country before. Using this type of drill rig will improve drilling capabilities and will improve health and safety aspects making sure workplace injuries are reduced.

According to the press release announcing the project Mighty River Power’s General Manager Development, Mark Trigg said the international geothermal technology supplier ORMAT had been awarded the project under an EPC (Engineering, Procurement and Construction) arrangement. As a turn-key contract, this significantly reduces construction risk to Mighty River Power.

“The benefit of the ORMAT design for this development is its modular nature, allowing four generation units to be built in this first phase of the project, with infrastructure capacity sufficient to allow for further units to be added in the future.” He said the construction phase over the next two years would create several hundred jobs with contractors and local suppliers.

More Information about the Nga Tamariki Geothermal Project

Visit the Mighty River Power website to get the latest news releases about the progress of the project.

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