PNOC-EDC eyes $50-M loan from IFC

PNOC-Energy Development Corp. (EDC) is planning to tap the International Finance Corp. (IFC) for a possible $50-million loan, the international lending agency said.

PNOC-EDC, the geothermal power unit of the state-owned Philippine National Oil Co. (PNOC), is set to undertake an initial public offering (IPO) starting Dec. 13 this year. IFC, on the other hand, is the private sector investment vehicle of the World Bank.

Based on initial talks, the WB unit would finance part of the geothermal firm’s capital expenditures for the medium-term.

According to the IFC, the expenditure program of EDC in the near-term would include acquisition of a new drilling rig, rehabilitation of existing drilling rigs, and expansion and development of geothermal production fields.

Proceeds from the proposed loan would also serve as a support fund for PNOC-EDC’s expenditure program, on top of the funds that would be raised from the IPO.

The IPO is expected to raise some $300 million proceeds.

"The project is expected to have a strong development impact by increasing the availability of additional resources to the company for its medium-term capital expenditure program. These additional resources will be used to develop new energy projects that will help the country reduce its dependence on imported fossil fuels and accelerate a change in its energy mix towards more sustainable non-fossil fuels," IFC said.

Aside from expansion program, IFC said one of its roles in this investment will be to work with the company on enhancing its corporate governance, and environmental and social risk management.

IFC said it has experience in evaluating and financing geothermal, hydroelectric and wind power projects, and new and renewable energy (NRE) projects, which the company could draw upon.

PNOC-EDC is the largest geothermal steam and electricity producer accounting about 60 percent of the country’s total installed geothermal capacity of 1,905 megawatts (MW).

To date, it has four existing geothermal production fields: Bacon-Manito geothermal production field (150 MW), Leyte geothermal production field (701 MW), Southern Negros geothermal production field (192 MW) and Mindanao geothermal production field (106 MW) or with total geothermal capacity of 1,149 MW.

It also engages private-sector electric power generators to operate geothermal power plants on a build-operate-and transfer (BOT) basis for a specified 10-year concession period.

Formed in 1984, PNOC-EDC is mandated to accelerate the exploration and development of the Philippines’ indigenous energy resources.