EDC starts selling green bonds

Danessa Rivera (The Philippine Star) - June 18, 2021 - 12:00am

MANILA, Philippines — Lopez-led Energy Development Corp. (EDC) has started selling three- and five-year green bonds.

The bonds are slated for listing on the Philippine Dealing and Exchange Corp. (PDEx) on June 25.

The offer period for the initial tranche, which covers P3 billion with a P2-billion oversubscription option, will end on June 18.

The bonds have been rated PRS Aaa, with a stable outlook, by the Philippine Rating Services Corp.  and will be the first SEC-registered Peso ASEAN Green Bond issuance by a local power company.

The green bonds are priced at the lowest end of the range of 2.8565 percent and 3.7305 percent for the three-year and for the five-year series, respectively.

EDC hired BDO Capital and BPI Capital as joint issue managers and joint lead underwriters and bookrunners, with SB Capital as co-lead underwriter for the transaction.

The company expects to net up to P4.93 billion from the offer, assuming the oversubscription option is fully exercised.

“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.  In particular, it will fund our geothermal expansion projects and maintenance capital expenditure projects so that we can meet the baseload or 24/7 power needs of our customers,” EDC president and COO Richard Tantoco said.

EDC will use the proceeds to fund a portion of the capex for its Palayan Bayan binary project, Mindanao III binary project, and other geothermal capex for natural catastrophe resiliency, powerplant equipment upgrades, spare parts replacements, and other capex projects.

The 29-megawatt Palayan binary plant, which has an estimated cost of P6.4 billion and is targeted to be completed in 2022, will boost the overall power generation capacity of the existing Bacman geothermal power plant – the 120-MW Bacman I and 20-MW Bacman II.

The company is also constructing the 3.6-MW Mindanao 3 binary plant with target completion in the first half of 2022. This expands the 52.3-MW Mindanao I and 50.93-MW Mindanao II geothermal power plants in Mt. Apo.

If the bond offer is fully subscribed, the Lopez firm will allocate P1.67 billion to the Palayan Bayan binary project, P1.8 billion to the Mindanao III binary project, and P1.47 billion to other geothermal capex.

EDC is the largest pure renewable energy company in the Philippines, operating 1,186 MW of geothermal, 150 MW of wind, 132 MW of hydroelectric power and 12 MW of solar power plants –  for a total of 1,480 MW of clean and renewable energy.

Recognized as a world leader in wet steam field technology, the company operates in various locations in the country, including in Bicol, Leyte, Negros Island, and Mindanao.

EDC, through its subsidiaries, also operates the biggest combined wind and solar farm in the region, located in Burgos, Ilocos Norte.  It  has substantial hydropower assets located in Nueva Ecija.

The company accounts for 19 percent of the country’s total installed renewable energy capacity and comprises 62 percent of the nation’s total installed geothermal capacity.

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