Investing in Philippines: Stock Market News: EDC eyeing expansion in Chile

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Tuesday, July 19, 2011

Stock Market News: EDC eyeing expansion in Chile




EDC to expand geothermal projects overseas

07/17/2011 | 04:37 PM 

Energy Development Corp. (EDC) may soon be operating 13 concession areas in Chile as part of its overseas expansion program.

EDC president and COO Richard Tantoco said they have also “submitted bids for five other concession areas in Chile" on top of the 13 applications for concession areas there.

The company, an affiliate of the Lopez-led First Gen Corp. is looking to becoming an international geothermal company.

“In 2010, we began to plant the seeds for global expansion in countries like Chile, Kenya and Indonesia and we hope to see these initiatives bear fruit in the next few years," said EDC chairman and CEO Federico Lopez.

In March this year, EDC set up EDC Chile Limitada, a subsidiary in Chile. EDC Chile Limitada is a limited liability company incorporation in Satiago, Chile, that explores, evaluates and extracts minerals or substances to generate geothermal energy.

Tantoco added that EDC is also looking into possible geothermal project areas in Indonesia, where they are also applying for greenfield concession areas.

“In Indonesia, progress has been slower as we continue to explore areas and consider joint venture with holders of concession areas," Tantoco said.

EDC has also received join venture offers from different countries, owing to their 35 year experience in geothermal technology, said Tantoco.

“Here, we will tread carefully and prudently, and work only in jurisdictions with attractive resource and favorable investment environment," he added.

The overseas projects are expected to begin in 2015 or 2016. Tantoco did not give cost estimates of the expansion but said that a geothermal project costs around $4 million per megawatt to develop.

In May this year, EDC posted a decline in net income for the first quarter of 2011 because of lower revenues and higher acquisitions costs, slipping 61.4 percent to P3.77 billion while core net income went down 61 percent to P1.23 billion.

EDC has 1,199 megawatts (MW) of geothermal capacity and 132 MW of hydro installed capacity. The company is also working on an 86 MW wind farm in Northern Luzon. - BC/KBK, GMA News



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