EDC seals deal to set LatAm expansion

Business Mirror
TUESDAY, 29 NOVEMBER 2011 18:47 PAUL ANTHONY A. ISLA / REPORTER

GEOTHERMAL giant Energy Development Corp. said on Tuesday it is making headway in its overseas expansion targets after it sealed a deal with Hot Rock Ltd. (HRL), an Australia-based renewable energy company holding one of the largest geothermal acreages in that country. 
EDC said in a statement that HRL signed a heads of terms agreement (HOTA) that gave EDC a 70-percent equity with respect to HRL’s four geothermal projects in Chile and Peru.

The agreement sets the framework and main commercial principles for EDC’s acquisition of a 70-percent interest in the granted volcanic Calerias and Longavi geothermal projects in Chile, where EDC has a representative office, and the Quellaapatcheta and Chocopata geothermal projects in Peru. 

Completion of the proposed transaction remains subject to the satisfaction of certain conditions, including fully termed documentation, confirmatory due diligence and necessary regulatory and governmental approvals.

EDC noted that HRL has already completed most of the surface exploration activities in the geothermal projects. Within the next six months, both EDC and HRL intend to immediately finish the remaining surface exploration activities. 

Based on the HOTA, EDC and HRL will establish joint-venture companies to hold each of the geothermal projects, with EDC owning a 70-percent interest and HRL maintaining a 30-percent stake.

“We are excited with the prospect of developing with Hot Rock Ltd. what we consider as some of the best geothermal concessions in both Chile and Peru. The ability to grow our business with full control over our steam fuel supply is the strategic rationale for the Lopez Group’s acquisition of the controlling stake in EDC,” Richard Tantoco, EDC President and Chief Operating Officer, said. 

“We are well on our way to becoming a true national champion, where Filipino expertise will be used to bolster a position of leadership in a global industry,” the EDC official said. 

Mark Elliot, HRL Executive Chairman, said his company is excited to undertake the agreement that establishes the company’s first major partnership deal with EDC.

As part of its aggressive growth targets, EDC has submitted direct applications for 13 sites and bids for five sites in Chile. EDC is also looking at opportunities to develop geothermal projects in Indonesia, Kenya and Peru.

EDC is the world’s largest integrated producer of geothermal power and the acknowledged global leader in wet steam technology. It is engaged in the exploration, development and optimization of geothermal fields, as well as the operation and maintenance of the geothermal power plants with an aggregate capacity of 1,130 megawatts.