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| PNOC-EDC Loan |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26529 |
| Company name | Energy Development Corporation |
| Country | Philippines |
| Sector | Utilities |
| Environmental category | B |
| Department | Sub-National Finance |
| Status | Active |
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| Date SPI disclosed | June 3, 2008 |
| Projected board date | July 3, 2008 |
| Previous Events | Invested: January 5, 2009
Signed: November 25, 2008
Approved: July 3, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| PNOC-Energy Development Corporation (PNOC-EDC or the company) is an integrated geothermal steam and electric power producer with its core activities being the exploration, development, and production of geothermal energy. The company is an existing IFC client and is seeking financing to support their medium term capital expenditure program. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is PNOC-EDC, which began its commercial operations in 1984 as a government owned and controlled corporation tasked to accelerate the exploration and development of the Philippines’ indigenous energy resources. The company, formerly a subsidiary of Philippine National Oil Company (PNOC), has become fully private in 2007 and is now majority-owned by First Gen Corporation, through Red Vulcan Holdings. |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment will be a $100 million A loan and potentially a $100 million B loan. The proceeds of the loans will be used to partially finance the company’s medium term capital expenditure plan. |
| Location of project and description of site |
| The company is headquartered in Metro Manila, Philippines, and its major projects are located on the islands of Luzon, Leyte, Mindanao, and Negros. |
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| Anticipated development impact of the project |
| PNOC-EDC is the largest company currently exploiting geothermal sources of energy in the Philippines, thus our support of this newly privatized company will provide critical additional resources of an appropriate tenor to help develop projects in the geothermal energy sector and thereby, help the country move toward greater reliance on private sources of growth in the infrastructure sector. Availability of additional resources for expansion and other investments in the industry will contribute towards the country’s effort to accelerate a change in its energy mix towards renewable energy. |
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| IFC's expected development contribution |
| IFC’s role in this investment will be to work with the company by providing fixed rate, long term local currency financing needed to help the company continue its transition to being a leading global large-scale clean renewable energy producer. Also, IFC will continue to work with the PNOC-EDC on further improving its corporate governance as well as environmental and social risk management practices. Furthermore, IFC has experience in evaluating and financing geothermal, hydro and wind power projects, and New and Renewable Energy (NRE) projects, which the company could draw upon, especially as it expands its operations in other developing countries. |
| Environmental and social issues - Category B |
| This is a category B project. Considering the corporate investment nature of the project to support the medium term capital expenditure program without any specified proceeds of the loan and the fact that this would be a second investment in the company made in 2006, IFC’s review focused on the updated information about the environmental and social assessment and management systems of the company. IFC's review has concluded that the company's environmental and social management system is functioning well to manage existing operations and future development projects in an environmentally and socially sound way and their current performance levels are in general consistent with the requirements of the IFC's Performance Standards on Social and Environmental Sustainability. |
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| For inquiries about the project, contact: |
Mr. Paul A. Aquino, President/CEO
PNOC-Energy Development Corporation
4th Floor, Bldg. 5 Energy Center
Merritt road, Fort Bonifacio
Taguig, Metro Manila, Philippines
Website: http://www.energy.com.ph |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
When Environmental Impact Assessment Reports or Initial Environmental Examination Reports are prepared for any new development projects, the reports are disclosed locally, at each relevant community of the project affected areas.
Various environmental and social information about the company’s performance is also disclosed at PNOC EDC’s website: http://www.energy.com.ph/. |
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