IFC commits loan package to EDC for climate change

The International Finance Corp. (IFC), the investment arm of the World Bank Group in the private sector, has committed to extend more loans to the Lopez-owned Energy Development Corp. (EDC) for projects to mitigate climate change.

 “As a supporter of environmentally sustainable companies, IFC is pleased to work once again with EDC in its efforts to mitigate climate change, and our financing of renewable energy producers like EDC is a demonstration of this commitment,” said Jesse O. Ang, IFC resident representative for the Philippines.

IFC recently signed a loan agreement with EDC, the largest emerging market geothermal producer, to help the company with its renewable-energy initiatives and to improve efficiency in the geothermal energy sector in the Philippines and the region.

The 15-year loan of P4.1 billion ($82 million) will enable EDC to acquire more geothermal assets. The company is the dominant geothermal steam and power producer in the Philippines, with 60 percent of the country’s installed geothermal capacity. 

The company, formerly a state-owned enterprise called the Philippine National Oil Co.- Energy Development Corp. (PNOC-EDC), went through a staged privatization starting with its initial public offering in December 2006.   

IFC acted as a cornerstone investor and also helped EDC adopt best practices in corporate governance during its transition from a stated-owned enterprise to a fully private company.  

“This loan from IFC is a testament to EDC’s long-term vision of being not only the largest renewable energy company in the country but also to share its cutting-edge geothermal technology with the region and the world,” EDC president Paul A. Aquino said.

 “Despite the current financial crisis, IFC has proven to be our reliable partner in the development of this vital indigenous resource,” he added.

IFC has been investing in the Philippines for over 40 years and had established an office in Manila in 1977.

As of June 2008, the country ranked second among IFC’s exposures in the East Asia and Pacific Region, with about $898 million in 32 projects.

To complement its growing investments, IFC is also expanding its advisory services to include public private partnerships and supporting the development of small and medium enterprises.

IFC creates opportunity for people to escape poverty and improve their lives. It fosters sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments.

Its investments have so far totaled $16.2 billion in 2008, a 34 percent increase over the previous year.