Energy Development Corp. (EDC), the geothermal power producer of the Lopez family, intends to borrow up to $500 million to finance its capital expenditures and loan payments next year.

Of the target amount, some $200 million was already secured from the World Bank's private sector arm, the International Finance Corp., while the remaining would be raised through syndicated loans from several banks, according to EDC president and chief executive officer Paul Aquino.

Aquino said EDC would use the planned borrowings to fund its acquisition of government power assets.

"If we will be winning on our bids for National Power Corp. (Napocor) assets, we may need to borrow more," he said.

"We are looking at several banks. We have received numerous proposals. We are studying it right now," he added.

Aquino said they want to bid for Napocor geothermal assets such as Palinpinon, Tongonan and Bacman.

Meanwhile, Aquino said EDC has decided to review its hedging scheme to take into account the stronger yen.

The EDC chief noted that so far this year, the company had already hedged some ¥8 billion at ¥110 to a dollar. This was 67 percent of the ¥12 billion Miyazawa 1 loan due in June 2009.

But with the yen at ¥92 to ¥93 per dollar, it may have to review its hedging program and instead undertake a yen-dollar-peso hedging scheme that will enable EDC to have marginal losses.

"We had our risk assessment and we looked at our yen budget. It seems that it will not be a good thing to do if we will continue to hedge our yen loans at this point. It's a perfect time to buy dollar at P48," he said.

As of the first quarter of 2008, the company's total liabilities have gone down by 25 percent from P44.7 billion to P33.6 billion in the same period in 2007.

EDC's long-term debt as of the first three months of year stood at P25.3 billion, 83 percent of which are yen-denominated loans.