AboitizPower sets P80 billion for investments this year

By Lenie Lectura, BusinessMirror

Posted at May 20 2014 07:39 AM | Updated as of May 20 2014 03:39 PM

MANILA - Aboitiz Power Corp.—the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services—is pouring in as much as P80 billion in investment this year.

The amount forms part of the company’s bold move to add 2,000 megawatts (MW) to its portfolio in the next five years. At present, the company’s power-generation capacity is at 2,300 MW. “Together with our partners, we are looking at investing up to P80 billion in the greenfield and brownfield projects across the country in 2014.

This is just part of our more ambitious plan to expand our power-generation capacity by about 2,000 MW over the next five years,” said AboitizPower President and Chief Executive Officer Erramon Aboitiz during Monday’s stockholders’ meeting.

The additional capacity will be sourced from the 300-MW coal-fired power plant of AP Therma South Inc. in Davao, which is targeted to be completed next year. This power facility could be expended by another 30 MW.
Another 300 MW will come from the coal power plant of Therma Visayas in Cebu. The capacity of this facility could be expanded by another 150 MW.

The company is also eyeing an expansion of another 400 MW from the Pagbilao coal plant in Quezon.

AboitizPower also recently won the auction for the 153.1-MW Naga plant in Cebu. The power firm is banking on the planned 600-MW coal-fired power plant of RP Energy in Subic. This power project is a joint venture between Aboitiz and MGen, the power-generation subsidiary of Manila Electric Co. (Meralco).

“We also have an assortment of other plants—hydropower, geothermal and solar,” added Aboitiz.
In a broader perspective, AboitizPower is looking at opportunities in Southeast Asia and the Pacific. “We’re willing to look at opportunities abroad. We’re looking at Papua New Guinea and opportunities in Indonesia. We’re still firming this up,” Aboitiz said.

“We’re looking at geothermal, hydropower, etc. We’re talking to some partners. Our preference is not greenfield [projects],” Aboitiz added.

AboitizPower booked a net income of P4.2 billion for the first three months of the year, 9-percent lower compared with the yearago level. Core net income, likewise, declined by 3 percent to P4.4 billion at end-March due to the revaluation of consolidated dollar loans and placements which, it said, resulted in unrealized nonrecurring loss of P211.1 million.

The company’s generation and distribution businesses each registered lower earnings during the period.

In particular, its power-generation business registered P3.6 billion, 10-percent lower compared with the yearago level. It blamed the higher fuel cost brought about by the implementation of the geothermal resource sales contract or the Tiwi-MakBan plants and expiration of Pagbilao power plant’s income-tax holiday.

For the first quarter, AboitizPower added 14 MW to the Mindanao grid with the start of commercial operations of the Tudaya 1 and 2 run-of-river hydro plants. Works are also ongoing for the 14-MW Sabangan run-of-river hydro plant and the 300-MW Davao coal plant, both expected to be completed in 2015.

For the distribution business, the company posted a 17-percent decline in profit to P618.4 million, although electricity sales grew by 5 percent to 1,000 GWh This, however, was not enough to offset the higher costs registered by the Visayan Electric Co. Inc. Davao Light & Power Co. Inc. and Cotabato Light & Power Co. during the period.