Lopez-led EDC to buy 60% of another Lopez hydro company

MANILA, Philippines - Lopez-led Energy Development Corp. (EDC) will buy 60% of another Lopez firm in the hydropower sector, saying the renewable energy business presents growth opportunities for the company. "Our entry into the hydro-power sector clearly complements our portfolio and provides EDC with vast opportunities for growth," EDC President Paul Aquino told the stock exchange in a disclosure Thursday, as he announced their acquisition of First Gen Hydro Power Corp. (FGHPC) before the year ends. In separate disclosures, EDC and First Gen Corp. said the latter’s board had approved the sale of 60% of FGHPC to EDC for $105 million. FGHPC is a wholly owned subsidiary of First Gen and is the operating company of the 112-megawatt Pantabangan-Masiway hydroelectric power complex, which First Gen bought from the government in 2006. First Gen is a subsidiary of Lopez conglomerate First Philippine Holdings Corp. The acquisition is being managed and governed by a committee composed of EDC independent directors Vicente S. Perez, Jr., Eric O. Recto and Francis G. Estrada. The financial advisors are J.P. Morgan (SEA) Ltd. and Macquarie Capital (Singapore) Pte. Ltd. for First Gen and EDC, respectively. EDC, formerly known as the Philippine National Oil Co.-EDC, now accounts for more than 60% of the country’s installed geo-thermal capacity of 1,905 megawatts. It is responsible for making the Philippines the second largest producer of geothermal energy in the world, next only to the United States. The company’s total production of 1,150 megawatts comes from its geothermal stream fields in Leyte, Negros Oriental, Negros Occidental, Bicol and North Cotabato. "Pantabangan is a crown jewel of an asset and will open a lot of opportunities for EDC to grow and also learn about the attractive Luzon market," First Gen President and Chief Executive Officer Federico R. Lopez said in a statement. "With First Gen and EDC joining forces, we will have intensified and reinforced capabilities to build and develop future renewable energy projects," he added. The Pantabangan-Masiway plant was transferred to First Gen in November 2006, the first major generating assets of the National Power Corp. to be sold to the private sector. The plant includes turbine runners, generators, generator buildings, transformers and a water treatment plant. The 100-megawatt Pantabangan started operations in 1977 and consists of two 50-megawatt generating units . Meanwhile, the 12-megawatt Masiway started operations in 1981 and consists of one 12-megawatt generating unit. Both facilities are located in Pantabangan, Nueva Ecija Province in Central Luzon. — Ava Kashima K. Austria, BusinessWorld