IFC grants $75-M long-term loan to EDC

MANILA, Philippines - The International Finance Corp. (IFC), the private sector lending arm of the World Bank, has extended a $75-million long-term loan to Energy Development Corp. (EDC), the geothermal and renewable energy unit of the Lopez Group.

In a disclosure to the Philippine Stock Exchange, EDC said proceeds from the 15-year loan facility will be used to fund the company’s medium-term capital expenditure program.

In 2006, IFC bought some $50 million worth of shares of EDC during the company’s initial public offering (IPO).

IFC said this investment supports the Philippine government’s goal of privatizing energy sector assets and will improve efficiency and aid expansion in the geothermal energy sector.

The multilateral financing institution likewise said the equity investment would assist the country’s efforts to improve its energy mix toward the use of indigenous and renewable sources of energy.

IFC noted that the privatization of state-owned power assets is a key element of the Philippine government’s reform program for the sector.

The global public offering of up to 40 percent of EDC’s shares provides the reform agenda with renewed impetus, helping restore investor confidence and increasing private sector participation in the power sector.

EDC is majority owned by First Gen Corp., the power generation unit of the Lopez Group.

It is currently the largest producer of geothermal energy in the Philippines, accounting for 62 percent of the total country installed geothermal capacity in the country.

It owns and operates the 122-megawatt Pantabangan-Masiway hydro-electric plants and has investments in wind energy projects in Ilocos and other provinces.