EDC proceeds with joint venture, implements four agreements

Business World Online

Posted on June 18, 2013 10:22:49 PM

LISTED ENERGY Development Corp. (EDC) has taken the next step in its partnership with Canada-based Alterra Power Corp. through the execution of shareholders’ agreements for four geothermal power projects in Chile and Peru.

In a disclosure yesterday, the Lopez-led firm said: “EDC, Alterra and their relevant subsidiaries have executed four Shareholders’ Agreements and other related agreements... all with effect on 17 June 2013 for the implementation of the terms of the JVA (joint venture agreement).”

Last May 20, the two companies executed a joint venture agreement for the exploration and development of the Mariposa geothermal power project in Chile and three projects in Peru, identified as Tutupaca Norte, Loriscota and Crucero.

EDC further said that under the shareholders’ agreement for the Mariposa project, its wholly owned subsidiary in Chile will acquire a 70% interest in Compañia De Energia (ENERCO), a subsidiary of Alterra who owns the Mariposa project.

“Alterra will continue to hold a 30% interest in ENERCO through its wholly owned subsidiary Magma Energy Chile Limitada, subject to the terms of the Shareholders’ Agreement for the Mariposa Project,” the company noted.

On the other hand, the terms of each shareholders’ agreements for the projects in Peru provide that a new company will be incorporated for each project, which will be responsible for developing the geothermal assets.

The company said that each Peruvian project will be owned by EDC’s wholly owned unit in Peru and “30% owned by Magma Energia Geotermica Peru S.A.,” which is another wholly owned subsidiary of Alterra.

“EDC’s continued participation in the Peruvian Projects and the Mariposa Project is subject to EDC’s resource assessment of each of the projects in accordance with the terms of the Project Agreements,” the Lopez-led company said.

In October last year, EDC signed an agreement with Alterra to allow the Lopez-led company to conduct exploration field works and due diligence at Alterra Power’s geothermal concession in Chile and geothermal authorizations in Peru.

The agreement gave EDC an “option to advance the projects to joint venture stage.”

Alterra Power, according to its Web site, is a renewable energy company that operates six power plants with an aggregate capacity of 567 megawatts (MW) in Canada, Iceland and Nevada in the United States.

In April, EDC and its Australian partner, Hot Rock Ltd. (HRL), formed a joint venture company that will undertake geothermal resource exploration in Peru.

The two companies established Geotermica Quellaapatcheta Peru SAC “for EDC and HRL to jointly own and develop the Quellaapacheta Authorization (project).”

The new company was formed under a joint venture agreement between EDC and HRL and a shareholders’ agreement between EDC Geotermica and Hot Rock Peru S.A.

EDC currently operates 12 power facilities in five geothermal service contract areas in the country, including the 192.5-MW Palinpinon plant in Negros Oriental and 112.5-MW Tongonan plant in Leyte. It is also involved in hydropower generation through First Gen Hydro Corp., which operates the 132-MW Pantabangan-Masiway plant in Nueva Ecija.

The company’s net income dropped by 5.24% to P2.98 billion in the first quarter from P3.15 billion in the same period last year. Its revenues decreased by 2.53% to P6.94 billion from P7.12 billion, while cost of sales of electricity slipped by 6% to P2.19 billion from P2.33 billion.

EDC shares gained five centavos or 0.84% to close at P6 apiece yesterday. -- Claire-Ann Marie C. Feliciano   source