The Lopez-led Energy Development Corp. (EDC) has secured a $315-million financing deal with separate groups of foreign and local banks for the construction of its 150-megawatt (MW) Burgos Wind Project (BWP) in Ilocos Norte.
The financing facility, which consists of US-dollar and Philippine-peso tranches, will mature in 15 years.
Eksport Kredit Fonden, Denmark’s export credit agency, guaranteed a part of the dollar loan component.
The mandated lead arrangers (MLA) for the foreign tranche are Australia and New Zealand Banking Group Limited (ANZ), DZ Bank AG, ING Bank NV, Malayan Banking Berhad (Maybank), and Norddeutsche Landesbank Gironzentrale.
The local tranche was arranged by PNB Capital and Investment Corporation and SB Capital Investment Corporation. The local lenders include BDO Unibank, Inc., Land Bank of the Philippines, Philippine National Bank, and Security Bank Corporation.
“This fresh loan is a sign of confidence from funding institutions on EDC’s ability to execute a strategic business plan for our wind project amidst intense competition in the renewable energy industry,” said Richard Tantoco, EDC president and chief operating officer.
With the BWP construction in full swing, Tantoco expressed confidence that they will meet their target commissioning date for the plant to qualify for the feed-in-tariff (FIT).
FIT refers to an economic policy created to promote investments in renewable energy sources. Feed-in tariffs typically make use of long-term agreements and pricing tied to costs of production for renewable energy producers.
The BWP, which is expected to come on stream within the year, aims to be the first wind project to avail itself of the FIT, which the Department of Energy grants to 200 MW wind projects on a first to commission, first served basis.
The Burgos Wind Project’s entire electrical output will be sold under the FIT system pursuant to the Renewable Energy Act of 2008.
Once operational, the BWP will be the largest wind farm in the Philippines with 50 Vestas V90-3.0 MW wind turbines and an ancillary plant to be supplied and constructed by Vestas, the world’s leading wind turbine manufacturer.
Besides the wind farm, the project also includes a 115 kV transmission line connecting the wind farm to the Laoag City substation of the National Grid Corporation of the Philippines.
“This project underlines EDC’s strategy to be the country’s leading diversified renewable power company. As we provide 370 GWh of electricity to power approximately 2 million households, we also will displace about 200,000 tons of carbon emissions annually,” Tantoco said.
To date, the BWP is one of the largest investments in Ilocos Norte where it occupies a 600-hectare site covering three barangays, namely, Saoit, Poblacion and Nagsurot in Burgos.
It is also EDC’s first wind power project after establishing itself as the country’s leading geothermal producer.