EDC Seals Deal with Australian Firm for Latin America Expansion
(PHStocks) – Energy Development Corp. (PSE: EDC), the world’s largest integrated geothermal company, is making headway in its overseas expansion targets as it sealed a deal with Hot Rock Limited (HRL), an Australian based international renewable energy company holding one of the largest geothermal acreage in Australia. HRL, on November 28, 2011, signed a Heads of Terms Agreement (HOTA) with EDC, giving EDC a 70% equity stake in respect of HRL’s four geothermal projects located in Chile and Peru.
The HOTA sets the framework and main commercial principles for EDC’s acquisition of a 70% interest in the granted volcanic Calerias and Longavi geothermal projects in Chile, where EDC has a representative office, and Quellaapatcheta and Chocopata geothermal projects in Peru. Completion of the proposed transaction remains subject to the satisfaction of certain conditions, including fully termed documentation, confirmatory due diligence and necessary regulatory and governmental approvals.
HRL has already completed most of the surface exploration activities in respect of the subject geothermal projects. Within the next 6 months, both EDC and HRL intend to immediately finish the remaining surface exploration activities. Based on the HOTA, EDC and HRL will establish joint venture companies to hold each of the geothermal projects, with EDC owning a 70% interest and HRL maintaining a 30% stake.
“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. 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,” EDC President and COO Richard Tantoco said.
Hot Rock Executive Chairman, Dr. Mark Elliott commented, “We are excited to have executed this HOTA, 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.”
As part of its aggressive growth targets, EDC, on its own, has submitted direct applications for 13 sites and bids for 5 sites in Chile. 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. EDC is engaged in the exploration, development and optimization of geothermal fields, as well as the operation and maintenance of the geothermal power plants with an aggregate capacity of 1,130 MW.