Energy Development Corp. (EDC) has acquired a 70-percent stake in each of the four geothermal concession areas in Chile and Peru, as part of its efforts to expand operations globally.
In a disclosure to the Philippine Stock Exchange, EDC said it already signed on Monday a heads of terms agreement with Australian firm Hot Rock Ltd. (HRL), which acquired the rights over these geothermal areas.
“The agreement sets the framework and main commercial principles for the acquisition by EDC of a 70-percent interest in four geothermal concession areas acquired by HRL in the volcanic regions of Calerias and Longavi in Chile and the Quellaapatcheta and Chocopata regions in Peru,” the Lopez-controlled firm explained.
Based also on the agreement, EDC and HRL will establish joint-venture companies to hold each of the geothermal projects, with EDC owning a 70-percent interest and HRL maintaining a 30-percent stake, according to a separate statement issued Tuesday.
According to EDC, HRL has already completed most of the surface exploration activities in respect of the subject geothermal projects.
Within the next six months, both EDC and HRL intend to immediately finish the remaining surface exploration activities.
“We are excited with the prospect of developing with Hot Rock Ltd. what we consider as some of the best geothermal concessions in both Chile and Peru. The ability to grow our business with full control over our steam fuel supply is the strategic rationale for the Lopez Group’s acquisition of the controlling stake in EDC,” said EDC president and COO Richard B. Tantoco.
“For EDC, our 35-year head start coupled with our word-class capabilities for geothermal exploration and development has once again given us precedence as we vie for markets overseas. We are well on our way to becoming a true national champion, where Filipino expertise will be used to bolster a position of leadership in a global industry,” he explained.
“We are excited to have executed this (agreement) with the intention of establishing our first major partnership deal with EDC, the world’s largest integrated geothermal company with 35 years of experience in volcanic terrains and with a strong balance sheet,” added Hot Rock executive chairman Mark Elliott.
As part of its aggressive growth targets, EDC, on its own, has submitted direct applications for 13 sites and bids for five sites in Chile, where it has already put up an office.
EDC is also looking at opportunities to develop geothermal projects in Indonesia, Kenya and Peru.
EDC is the world’s largest integrated producer of geothermal power and the acknowledged global leader in wet steam technology. It is currently engaged in the exploration, development and optimization of geothermal fields, as well as the operation and maintenance of geothermal power plants with an aggregate capacity of 1,130 megawatts.