Envent converts from geothermal to renewable energy contractor

MANILA, Philippines - Envent Holding Philippines Inc., a major geothermal developer backed by Icelandic investors, has converted of its geothermal service contract to a renewable energy service contract with the Department of Energy (DOE) under the new Renewable Energy Act of 2008.

Gudmundur F. Sigurjonsson, Envent chief executive officer, said this development will substantially boost the contractual base of the company’s Biliran geothermal project.

“The signing of this agreement with the DOE allows the Biliran project to take advantage of the multiple advantages that the recent ground breaking Philippine renewable energy legislation offers,” Sigurjonsson said.

“With the renewable energy legislation, the Philippines has taken a leadership position in Asia in terms of enabling private renewable energy companies to utilize renewable energy resources in a clear and well defined manner. The renewable energy legislation in the Philippines is clear, well defined and favorable,” the event official said.

He noted that with the new contract, Biliran Geothermal Inc. (BGI), the company executing the project, will be able to avail of various fiscal incentives such as income tax holiday for the first seven years of its commercial operations and special realty tax rates on equipment and machinery.

Envent is a geothermal developer active in Indonesia and the Philippines. Its most advanced project is its Biliran island project. Additionally, Envent has multiple applications for new geothermal working areas pending consideration by the DOE and is preparing applications for geothermal working areas in Indonesia.

Recently, Envent signed a number of power purchase agreements worth more than $350 million for the Biliran geothermal project.

Biliran Unit 1 is scheduled to come online in 2012 with a capacity of 50 megawatts. Biliran, located in the Eastern Visayas region, has an existing connection to the national power grid. The island lies just a few kilometers north of the island of Leyte.

Energy Secretary Angelo Reyes, in approving Envent’s geothermal contract conversion into an RE service contract, said: “The significance of this is, corporations like Envent is expressing confidence in investing in the renewable energy sector; firstly because we have the RE Law that was passed one year ago that afforded fiscal and non-fiscal incentives to renewable energy. Now we are seeing the fruit of the effort of our RE Law which is becoming a model for other countries.”

DOE assistant secretary Mario Marasigan said 161 renewable energy contracts have been sign over the past months, some of them involving the conversion of existing contracts, like Biliran and others for totally new renewable energy projects.

“We are happy with the progress that has been made with the project in Biliran over the past couple of years. We look forward to have power from the project feed as soon as possible to the electricity grid in Leyte reducing the unmeet electricity need in the region,” Marasigan said.

Aside from the Philippines, Envent has a renewable energy business dedicated to the exploration and development of geothermal resources in Indonesia.

Envent possesses a strong link with the Icelandic geothermal community. Its key shareholders are Iceland-based Geysir Green Energy and Reykjavik Energy Invest.

Iceland is considered a leader in renewable energy with an impressive 100 percent of the power capacity derived from renewable sources (23 percent geothermal and 77 percent hydro).