Lopez-led EDC awards P360-M construction deal to affiliate

MANILA, Philippines - Lopez-led Energy Development Corp. (EDC) has awarded a P360-million procurement contract to affiliate First Balfour Inc. In a disclosure to the stock exchange Wednesday, EDC said First Balfour had offered the lowest bid for a contract for various civil, structural, mechanical and pipe works for the Leyte geothermal field. The geothermal field is the world’s largest wet steam-producing field consisting of the 112.5-megawatt Tongonan Production Field, 132-megawatt Upper Mahiao power plant, 232-megawatt Malitbog power plant, 180-megawatt Mahanagdong A and B power plants, and 51 optimization plants. It supplies power to Cebu and Luzon via submarine cables. The construction contract will support operations of the Unified Leyte geothermal power plants, which include Upper Mahiao, Malitbog, Mahanagdong and the optimization plants. The geothermal field generates almost two-thirds of the company’s geothermal output and more than a third of the country’s total geothermal capacity. The Lopez family bought the government’s 60% stake in EDC, which used to be known as Philippine National Oil Co.-EDC, in November last year. First Balfour is one of the largest engineering and construction companies in the Philippines, with more than 37 years of construction experience. It is a fully owned subsidiary of Lopez holding company First Philippine Holdings Corp., one of the largest Philippine conglomerates with interest in power and energy, infrastructure, manufacturing and property development. EDC, according to its Web site, now accounts for more than 60% of the country’s installed geothermal capacity of 1,905 megawatts. It is responsible for making the Philippines the second largest producer of geothermal energy in the world, next to the US. The firm’s total production of 1,150 megawatts comes from its geothermal stream fields in Leyte, Negros Oriental, Negros Occidental, Bicol and North Cotabato. Meanwhile, First Gen Corp. President Federico R. Lopez said he was bullish about their acquisition of EDC despite the global financial turmoil. Speaking at a management conference in Makati Wednesday, Mr. Lopez said EDC would flourish amid the global slowdown. "I still believe that the value of EDC is actually double of what it is today, and we are very optimistic that we will double our recurring net income of P6.5 billion in the next three to five years," he said. - BusinessWorld