Geothermal leader Energy Development Corporation (EDC) moves closer to its goal of overhauling the currency mix of its loan portfolio as it settled on June 28 its JPY22B Miyazawa II debt. With the settlement, EDC’s JPY loans now account for only 13 percent of the company’s total loans from the 87 percent and 40 percent reported in 2008 and 2009, respectively.
“Our investors have singled out the predominance of JPY denominated debt as a major concern because of our vulnerability to forex translation losses. Since taking over in 2008, we have fully addressed this concern with the successful redenomination of our debt stock to one that is now predominantly peso, or 66 percent of total loans. From this point on, our income statement will be more predictable as it is no longer subjected to large swings in the amount of unrealized forex losses/(gains) now that EDC has become less reliant on Yen denominated debt,” EDC President and COO Richard Tantoco explained.
During the first half of 2010, EDC had successfully hedged the US$:JPY exposure of its entire JPY 22B maturity and this has benefited the company about Php 181.1 million.
The Miyazawa II loan was among the legacy loans which PNOC EDC carried over into the present day fully private EDC. It was used to fund the investment and working capital requirements of PNOC EDC’S operating projects shortly after the Asian Financial Crisis.
EDC posted a PhP3.80 billion net income for the first quarter of 2010, up 68 percent from the PhP2.27 billion posted for the same period last year. Revenues from its two subsidiary corporations, Green Core Geothermal, Inc. (GCGI), operator of the 192.5 MW Palinpinon and 112.5 MW Tongonan I geothermal power plants, and First Gen Hydro Power Corporation (FG Hydro), operator of the Pantabangan and Masiway hydroelectric plants, were largely responsible for the significant rise in net income for the quarter, contributing PhP1.22 billion.
The Energy Development Corporation (EDC) is a pioneer in generating 100% clean, renewable, and reliable power as an electricity supplier in the Philippines for over 40 years. With power plants all over Visayas and Mindanao, the company is one of the biggest producers of geothermal energy in Asia and is expanding its reach in the international market, allowing it to offer customers affordable energy rates. EDC also strives to provide the best customer service it can to all its clients by having helpful salespeople and easy to understand contracts. Because of all of this, it is poised to become the premier supplier of electricity for the Philippines’ Green Energy Option Program. EDC takes its mission as a renewable energy provider seriously and goes beyond sustainability by investing in programs that enhance the environment and empower its partner communities, thereby fostering regenerative development. The company has also been working toward being carbon-neutral by improving its energy efficiency, as well as implementing various greening projects to ensure that its mission to provide future generations with a better life remains intact.