EDC withdraws from 2 geothermal projects in Chile

MANILA, Philippines - Lopez-led Energy Development Corp. (EDC) has dropped its plan to enter into two geothermal projects in Chile following initial survey results.

Instead, the world’s top geothermal producer will focus on two new projects in Peru and three existing areas in Chile.

“EDC made the decision not to pursue [the Calerias and Longavi projects in Chile] pursuant to its rights under foregoing agreements,” the company said in a disclosure.

This, given results of initial geo-scientific surveys conducted by a team of geothermal scientists early this year, the energy firm said.

In February, EDC and Hot Rock Ltd. of Australia signed an agreement to acquire four geothermal projects in Chile (Calerias and Longavi) and Peru (Quellaapacheta and Chocopata).

“EDC’s decision does not have a material effect on EDC’s existing operations and financial condition as such projects were in preliminary stages for evaluation only,” the company said.

But Chile is still in the radar of the geothermal company, an official said.

“We still have three areas in that we acquired on our own and will be working on,” Erudito Recio, investors relations manager of EDC, said in a text message.

“Also, we have a business development team in Chile looking for an already-owned prospects available for possible joint venture or even acquisition in Chile,” Recio said.

In January, EDC bagged its first international concession contract in Chile called Newen, allowing it to develop the area and later build a geothermal facility should reserves in the area prove economically feasible.

Recio said the same team will handle the development of business opportunities in the other Latin American countries.

Furthermore, EDC is still looking at Peru to expand its operations outside the Philippines.

“EDC and Hot Rock commenced the incorporation process of the Chocopata and Quellaapacheta project companies where EDC will own a 70-percent stake,” the firm said.

“Completion of the transaction remains subject to certain conditions, including confirmatory due diligence,” EDC said.

Other requirements are regulatory approvals on the transfer of the geothermal projects.

In May, EDC signed shareholders’ agreements with Hot Rock for the entry into Chile and Peru. The deal finalized the plan for the firms to create project companies for each of the geothermal projects.

EDC’s partner Hot Rock is listed on the Australian Stock Exchange. It has so far acquired 23 geothermal tenements across Chile, Peru and Australia.

Aside from Latin America, EDC is also looking at opportunities to develop geothermal projects in Indonesia and Kenya.

EDC is the world’s largest integrated producer of geothermal power. It is into the exploration, development and optimization of geothermal fields, as well as the operation and maintenance of the geothermal power plants with an aggregate capacity of 1,130 megawatts (MW).