MANILA, Philippines - Lopez-controlled Energy Development Corp. (EDC) is pushing its bid for the 192.5 megawatt Palinpinon and 112.5 MW Tongonan geothermal plants.
The Power Sector Assets and Liabilities Management Corp. (PSALM) decided to bid out the two geothermal power facilities as a single package on Aug.12.
“We will aim to win these assets. They are crucial to us because we supply the steam,” EDC president Paul Aquino said.
He said EDC will have “flexibility in their operations once they own the geothermal power facilities.”
“We can make the plants more efficient. We will win it,” he stressed.
Aquino said EDC is readying its offer and has, in fact, been looking at possible financing sources should it wins the bidding.
“We will participate in the bidding on August 12 and we have to have money for that,” Aquino said.
The Palinpinon geothermal facility is located in Puhagan, Valencia, Negros Oriental.The plant utilizes steam supplied by EDC, a former unit of state-run Philippine National Oil Co. (PNOC).
Palinpinon 1, with an installed capacity of 112.5 MW, was commissioned in 1983. An additional 80 MW was added from 1993 to 1995, bringing its total capacity to 192.5 MW.
The Palinpinon power plant supplies 18-20 percent of the electricity demand in the Cebu-Negros-Panay-Bohol-Leyte-Samar grid.
PSALM had planned to auction the Palinpinon plant last year but decided to move the bidding this year due to issues surrounding the geothermal resources supply contract or the steam supply contract.
The Tongongan geothermal facility, located in Lim-Ao, Kananga, Leyte, was also commissioned in 1983 and also uses steam supplied by EDC.
The two geothermal plants has drawn strong interest from EDC, the country’s leading geothermal energy producer.
Last May, the EDC board approved the increase in the company’s capital to P31.50 billion from the present P5.075 billion.
The increase will allow the company to issue new common and preferred shares and raise fresh capital in the process.
“To fund EDC’s growth, we should not only rely on additional borrowings because debt capital markets can tighten and have tightened in the very recent past,” Aquino said.
The company’s existing borrowing capacity is estimated at $600-$800 million.