Energy

Renewable energy and resilience in the Philippines

Energy Development Corporation.

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Sector Energy
Sub-sector Geothermal
Invested 2017

Opportunity

In 2017-18, a Macquarie Asset Management (MAM) led consortium acquired a majority stake in Energy Development Corporation (EDC) – the Philippines’ largest renewable energy company1. Since then, MAM has supported the business as it increases the reliability and resilience of the Philippines’ renewable energy supply.

Powering economic and social development

EDC manages 1.5GW of renewable energy generation capacity across geothermal, solar, hydropower and wind. Representing approximately 20 per cent of total installed renewable energy in the Philippines2, EDC is a critical component of the country’s energy landscape.

When Typhoon Urduja hit the Philippines in December 2017, it dropped 1,400mm of water in four days3 and reduced generation capacity at EDC’s Malitbog Geothermal Power Plant by 50 per cent. At the time of the typhoon, the area was still recovering from a serious earthquake that occurred in the previous July.

Approach

With a focus on enhancing security of supply for the communities that rely on EDC’s clean electricity, MAM and its co-investors are supporting the business as it invests to increase the resilience of its portfolio against future extreme weather events.

This significant capital investment has included the installation of geohazard early warning systems and more robust modelling of potential slope failure and landslide risks. The business is also investing to reconfigure and reinforce pipelines and cooling towers to protect against seismic disruption.

 

Navigating complexity

MAM has a long track record of confidently leading consortiums through complex transactions. This experience was particularly valuable when MAM acquired its initial stake in EDC in 2017 after leading a consortium in a $US1.3 billion public tender offer for 47.5 per cent of the business. At the time of the offer, EDC was the 18th largest company by weighting on the Philippines Stock Exchange (PSE).

In late 2018, EDC was successfully delisted from the PSE and the MAM-led consortium increased their stake in the business to 54.1 per cent as a result. The initial investment and subsequent take-private was the second major energy deal for MAM in the region in the space of 12 months and saw it recognised as Asia-Pacific Energy Investor of the Year4.

 

 

Outcome

“We look forward to supporting EDC as it grows the contribution of renewable energy in the Philippines with a focus on providing secure, clean and safe energy to communities across the country.”

Michael Rodriguez, Managing Director

1.5 GW

of clean, renewable energy

20%

of installed renewable energy in the Philippines1

All information current as at 30 September 2020, unless otherwise stated.

1. By total installed geothermal energy capacity under management. https://www.energy.com.ph/
2. Based on total installed renewable energy generation capacity of 7,792 MW, Philippines Department of Energy, Summary of RE Projects as at 30 June 2020
3. 2018 Annual Stockholders Meeting Minutes, First Philippines Holding Corporation
4. 2017 Infrastructure Investor Awards

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