EDC’s Php15B bond issuance to fund expansion

EDC gets P3.6 billion loan from UnionBank for ‘debt refinancing’

Energy Development Corporation (EDC) said it intends to use the Php15 billion in proceeds from the ASEAN green bonds issuance for the expansion of its power plants, primarily geothermal. 

The first tranche of the bonds, worth up to Php5 billion, has been offered since Monday (June 14) and will go on until tomorrow (June 18). The first tranche bonds have a term of three years due in 2024.

EDC President and CEO Richard Tantoco said the firm’s maiden green bonds, also the first peso-denominated ASEAN green bond registered with the Securities and Exchange Commission, will help the company expand its 100% clean energy portfolio, which is crucial to decarbonizing the country’s growing economy. 

The Lopez-led firm said that the first tranche of the green bonds have a “PRS Aaa” rating with a stable outlook. Bonds that have the “PRS Aaa” are of the highest quality with minimal risk, while a stable outlook means that the rating is unlikely to change within the next 12 months.

EDC noted that the green bonds had been priced at 2.8565% for those with the three-year term and 3.7305% for those with the five-year tenor.

The firm’s portfolio consists of 1,186 megawatts (MW) of geothermal, 150MW of wind, 132MW of hydroelectric, and 12MW of solar power plants, for a total of 1,480MW.

Tantoco said that EDC will fund its geothermal expansion projects and maintenance capital expenditure (capex) projects to meet customers’ power needs. 

The firm previously said the proceeds will also be used to fund its capex and a portion of it is allocated for the Palayan Bayan binary project, Mindanao III binary project, and geothermal capex for natural disaster resiliency, maintenance materials, and other capex projects. 

Earlier this month, EDC broke ground and started the construction of its Php7 billion Palayan binary geothermal power plant, which is seen to add 29MW of capacity to its existing 130MW Bacon-Manito (BacMan) geothermal facility in Albay. The plant is targeted to go online by the end of 2022 and is expected to generate 215.8 gigawatt-hours of clean energy.