EDC set to acquire geothermal projects in Chile, Peru

Manila Times.net
Published : Wednesday, November 30, 2011 00:00 Written by : Euan Paulo C. Añonuevo


Energy Development Corp. (EDC) has signed a deal with an Australian firm to develop geothermal projects in Chile and Peru.
Richard Tantoco, EDC president, said the company signed a heads of terms agreement for the acquisition of 70-percent equity in Hot Rock Ltd.’s four geothermal projects in the South American countries.


“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,” Tantoco said.


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


Completion of the proposed transaction would depend on the satisfaction of certain conditions, including fully termed documentation, confirmatory due diligence and necessary regulatory and governmental approvals.


Hot Rock has completed most of the surface exploration activities at the projects. Within the next six months, EDC and Hot Rock intend to finish the remaining surface exploration activities.


According to their agreement, EDC and Hot Rock will establish joint venture companies to hold each of the geothermal projects, with the Philippine firm owning a 70-percent interest and the Australian firm a 30-percent stake.


Hot Rock holds one of the largest geothermal acreage in Australia, while EDC is the world’s largest integrated producer of geothermal power and the acknowledged global leader in wet steam technology.


As part of its expansion program, EDC earlier submitted direct applications for 13 sites and bids for 5 sites in Chile. EDC is also looking at opportunities to develop geothermal projects in Indonesia, Kenya and Peru.