September 17, 2015

Energy Development Corp signs EPC contract for BacMan 3

Energy Development Corp (EDC) disclosed yesterday that it signed a design and equipment supply contract with Hyundai Engineering Co Ltd (HEC) and a construction services contract with Galing Power & Energy Construction Co Inc for the engineering, procurement and construction (EPC) of its 31-MW Bac-Man 3 geothermal power plant in Sorsogon.

We gathered that HEC and Galing are the same contractors hired by Aboitiz Power Corp (AP) last year for the construction of a 300-MW coal-fired power plant in Toledo City, Cebu. The Bac-Man 3 project, which has an estimated project cost of P7.6b, will be the fourth greenfield geothermal project to be built by EDC in recent years following the successful commissioning of the 49.4 MW Nasulo geothermal power plant in July 2014, the 150MW Burgos wind farm in November 2014, and the 4.9 MW Burgos solar energy project in March 2015.

At present, EDC owns and operates 1,169 MW of integrated geothermal projects in Leyte, Negros Islands, Bicol and North Cotabato. Aside from the geothermal, wind and solar assets, EDC also owns operates the 132-MW Pantabangan-Masiway hydroelectric power plant, through its 60%-owned subsidiary First Gen Hydro Power Corp.

Our take: The project will further strengthen EDC’s power generation portfolio. However, this will not be earnings accretive in the next two years. The project is targeted for completion and operations by 4Q17. – WealthSec