A UNIT of Basic Energy Corp. has approved the principal terms of a 50-megawatt (MW) wind energy service contract with the Energy department in Mabini, Batangas, the listed firm disclosed on Wednesday.
In a regulatory filing, Basic Energy said that the board directors of its wholly owned subsidiary Mabini Energy Corp. also greenlit the move for Oscar L. de Venecia, Jr., the parent firm’s president, to sign the service contract, which would cover 4,860 hectares of land in Mabini Peninsula.
The company said the pro-forma wind energy service contract provides for a non-extendible five-year pre-development stage and a 25-year development stage, counted from contract signing, which is extendible for another 25 years, subject to the approval of the Department of Energy (DoE).
Basic Energy added that it would disclose more information once the DoE approves the contract, and when the contract is awarded to Mabini Energy.
A wind energy service contract is awarded by the DoE to qualified applicants who pass the legal, technical and financial evaluations on proposed wind power projects, which are intended for commercial use, the department said in its work program on on-shore wind projects.
In October 2019, the company said that it was considering venturing into wind power in Luzon. Basic Energy’s Mr. De Venecia previously said that the firm was looking into setting up a 40- to 50-MW wind farm in partnership with a foreign entity.
Wednesday’s disclosure comes after the company disclosed in December last year that it had signed a memorandum of agreement that provided for the sale of 67% of its outstanding capital stock to MAP 2000 Development Corp.
The shares will be subscribed and issued out of the increase in Basic Energy’s authorized capital stock to P5 billion from P2.5 billion, which is awaiting approval from the Securities and Exchange Commission.
The company said the increase in its authorized capital stock was meant to create enough shares of stock for subscription by possible investors.
Basic Energy shares in the local bourse jumped 12.26% or 0.13 centavos to close at P1.19 apiece on Wednesday. — Angelica Y. Yang