Harnessing Power from Beneath the Earth – from the Philippines to Latin America
The EDC team in Chile
Since its privatization in 2006, Energy Development Corporation has been at the forefront of providing cheap, renewable power to Filipino businesses and households, which have been paying one of the highest electricity prices in Asia.
EDC tapped the country’s vast subterranean geothermal reserves that can produce reliable and clean energy for hundreds of years. It found an early and consistent supporter in IFC, which took early equity stake in 2006 and provided funding in 2008 amid the global financial crisis.
Today EDC is looking beyond the Philippines -- helping other emerging markets develop sustainable energy sources. Last month, EDC acquired a 70 percent stake in four geothermal projects in Chile and Peru. The projects will be developed together with its Australian partner Hot Rocks Limited. Earlier, Chile’s Ministry of Energy awarded three exploration concession areas for EDC to develop exclusively.
“The acquisition of these concessions in Latin America are the first steps in realizing our vision to establish a global presence and further solidify our position as the pre-eminent international leader in geothermal power development,” said EDC Chairman and CEO Federico Lopez.
Low-Carbon Business Model EDC was originally a state-owned enterprise. In 2006, the Philippine government decided to privatize the power sector and listed EDC on the local stock exchange. IFC invested $49 million, boosting investor confidence at the critical pre-initial public offering stage.
The initial public offering was a success, and in 2007, the Lopez Group of Companies, a leading infrastructure conglomerate, took a controlling interest in EDC and began steering it to new heights.
When the global credit crunch threatened to halt EDC’s momentum in late 2008, IFC again stepped in with an $86 million local-currency loan. “No one else was lending to us at the time,” said Richard B. Tantoco, EDC President. “That took us over the tipping point, opening up our access to local bond markets and major banks that wouldn’t have shown interest in us before.”
Now the world’s largest integrated producer of geothermal power, EDC is seeking more geothermal concessions in Chile and looking to develop projects in Indonesia and Kenya -- replicating a low-carbon business model to help meet global energy demand and advancing South-South development.