Energy Development Corp. (EDC), the Lopez-led unlisted power generation firm, has filed a shelf registration of Asean Green Bonds worth P15 billion, a third of which will be immediately sold to the market.
Proceeds of the said bond float will be used for eligible green projects under the EDC Green Bond Framework, the company said. These include geothermal, wind energy, solar energy, hyrdopower and bioenergy projects.
Of the total shelf registration, the company will issue P5 billion in fixed-rate paper, P3 billion of which will be its primary offering and P2 billion as its oversubscription option in 3-year and 5-year bonds.
Net proceeds from the offer will be used for the partial reimbursement of equity contributed by EDC into Bac-Man Geothermal Inc. in the fourth quarter of 2020 and first quarter of 2021 for the funding of the capital expenditure requirements of Palayan Bayan Binary Project.
Proceeds will also be used for potential fresh equity contribution in the first quarter of 2022 for the Palayan Bayan project.
BDO Capital and Investment Corp. and BPI Capital Corp. were picked as joint issue managers, joint lead underwriters, and bookrunners, while SB Capital Investment Corporation will serve as co-lead underwriter.
The first tranche bonds shall be issued in denominations of P50,000 each, as a minimum, and in multiples of P10,000 thereafter, and traded in denominations of P10,000 in the secondary market.
The company plans to offer the bonds on May 10 through May 14, after which it will be listed at the Philippine Dealing and Exchange Corp.
EDC has picked Palayan Bayan Binary Project as an eligible green project. The said development is an expansion project which will utilize the existing geothermal resource of the reinjected brine adjacent to its geothermal operating power plant in Manito, Albay, using an organic rankine cycle process.
This is a process wherein heat from brine is used to produce electricity by heating up a motive fluid using heat exchangers to drive the turbine and produce additional electricity from the steam byproduct. The Palayan Bayan project will be developed and operated by Bac-Man Geothermal, a wholly-owned subsidiary, through equity contribution by EDC.
“The net proceeds shall not be used towards financing and/or refinancing of activities related to coal or any other fossil fuel-related technologies,” the company said.
For a debt paper to be marked as Asean Green Bond, it should follow the 4 core components of the International Capital Market Association’s 2018 Green Bond Principles that provide the guidelines on the use of proceeds of the bonds, process for project evaluation and selection, management of proceeds and reporting.
