EDC takes over Tongonan, Palinpinon geothermal plants

MANILA, Philippines - Energy Development Corp. (EDC), the country’s largest geothermal energy developer, assumed operations of the 112.5-MW Tongonan 1 and 192.5-MW Palinpinon geothermal power plants last Oct. 23.

The takeover of the two geothermal facilities came after EDC paid the government through the Power Sector Assets and Liabilities Management Corp (PSALM) some P3.9 billion representing 40 percent of the purchase price and $7 million for the purchase orders, rental, option price, performance security deposit on land lease, and industrial all-risks insurance policy and comprehensive general liability.

PSALM is a state entity in charge of disposing of the power generation assets and supply contracts of the National Power Corp. (Napocor).

For the remaining balance, EDC is tapping PSALM’s staple financing scheme allowing for deferred payments of up to seven years in 14 equal semi-annual installments.

EDC, through Green Core Geothermal Inc. (GCGI), acquired the two plants located in Leyte and Negros Oriental in an auction conducted by PSALM last Sept. 2 when it submitted the highest complying financial bid of $220 million.

GCGI is a subsidiary of First Luzon Geothermal Energy Corp. which is wholly owned by EDC.

“The acquisition of Napocor’s geothermal power plants is one of our major platforms for future growth. We have set our target and achieved it,” GCGI president Paul Aquino said.

The turnover of the Tongonan and Palinpinon power plants fully integrates the value chain of EDC’s geothermal business from steam production to power generation. And with the industry leaning more towards clean energy, EDC, with its 33-year head start in the geothermal business, is well positioned to address the supply shortage in the Visayas grid by providing cheaper and green power,” Aguino said.