Manila Times.net
By James Konstantin Galvez, Reporter
THE International Finance Corp. has granted a multimillion-dollar loan to Energy Development Corp. to improve its power generation capability and contribute to lower electricity rates.
Jesse Ang, IFC resident representative, said the $75 million investment would help EDC increase its generation capacity to 1,199 megawatts and enhance its competitiveness.
“Higher generation capacity will relieve power shortages in Mindanao, lower power rates and carbon emissions by up to 2.5 million tons per year,” Ang said.
To date, the Philippines has the highest electricity rates for residences in Asia at 18 cents per kilowatt hour, and the second-highest for businesses in the region at 13 cents per kilowatt hour.
Ang said the loan—the third since 2006—would also allow EDC to enhance its international operations in countries like Papua New Guinea, Indonesia and Chile.
The IFC said its investment is in recognition of EDC’s capability to harness energy from indigenous sources, which is a key advantage of geothermal power in the Philippines.
“This investment is consistent with IFC’s strategy to support low-carbon emission energy sources that ensure future energy needs are met in a sustainable manner, helping mitigate both global climate change and local environment concerns,” Ang said.
Federico Lopez, EDC chairman and chief executive, said the loan will support the company’s medium-term capital expenditure program as it aims to strengthen its position as the largest geothermal energy developer in emerging markets.
The IFC had invested $49 million in buying EDC’s shares during its initial public offering in December 2006, in support of the comprehensive power-sector reform program of the Philippines.
The investment has helped facilitate EDC’s privatization.
In November 2008, IFC committed a $100 million loan to EDC in its first long-term commercial loan without sovereign guarantee.
In November 2008, IFC committed a $100 million loan to EDC in its first long-term commercial loan without sovereign guarantee.
EDC shares fell to P6.36 apiece on Monday from P6.48 last Friday.
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