Energy Development Corporation : Clarification of news article “BacMan geothermal plant seen running by Sept.”

38th Floor, One Corporate Centre Julia Vargas corner Meralco Avenue Ortigas Center, Pasig 1605

Tel: [phone]

January 30, 2012

JANET A. ENCARNACION

HEAD, Disclosures Department

The Philippine Stock Exchange, Inc. Philippine Stock Exchange Plaza

Ayala Triangle, Ayala Avenue, Makati City

Dear Ms. Encarnacion:

We write in compliance with the PSE's request for clarification as regard the news article entitled "BacMan geothermal plant seen running by Sept." posted in the BUSINESSWORLD (online Edition) on January 29, 2012. The article reported in part that:
"ENERGY DEVELOPMENT Corp. (EDC) expects to complete rehabilitation work on it Bacon-Manito (Bac-Man) geothermal power Plant by September, more than a year later than planned, an official said last week."
"For BacMan, the base case assumption is that the plant would run in September this year. We were hoping to get it running by July last year but we started running one unit last December and there are really some issues you will find in the unit after it hasn't run in five to seven years, EDC President and Chief Operating Officer Richard B. Tantoco told reporters in an interview."
…
We confirm that the Company has taken the decision to effect further repairs on defects that were detected during the commissioning period. It is our expectation that these repairs will be completed within the third quarter, consistent with our base case assumptions when we acquired the asset from Government.