Energy firm ventures in hydropower business

MANILA, Philippines - Energy Development Corporation (EDC) on Thursday disclosed its entry in to the hydropower business when it offered to buy a majority stake in First Gen Hydro Power Corporation and which the latter approved. In a disclosure to the Philippine Stock Exchange, EDC said it made an unsolicited offer to First Gen Hydro for a 60-percent stake valued at $105 million. Both EDC and First Gen Hydro are units of First Gen Corporation, the power holdings firm of the Lopez group. In a separate disclosure, First Gen Corporation said its board accepted EDC's offer to buy 60 percent of its hydropower unit which operates the 112-megawatt Pantabangan-Masiway hydroelectric power complex. First Gen bought the power plant from the Power Sector Assets and Liabilities Management Corporation (PSALM) in November 2006. First Gen and EDC said they expect to close the deal by the end of the year. "Our entry into the hydro power space clearly complements our portfolio and provides EDC with vast opportunities for growth," EDC president and chief executive Paul Aquino said in a statement. EDC is currently developing an 86-MW wind farm in Burgos, Ilocos Norte. In a separate statement, First Gen chief executive Federico R Lopez said the sale to EDC is aimed at promoting renewable energy in the Philippines. Lopez said the Pantabangan-Masiway plant is a "crown jewel of an asset and will open up a lot of opportunities for EDC to grow." - Veronica C. Silva, GMANews.TV