Business World Online
Posted on September 10, 2014 10:45:00 PM
ABOITIZ Power Corp. (AboitizPower) is continuously exploring opportunities outside the Philippines to grow its power generation business, an official from the parent firm told reporters yesterday.
Stephen G. Paradies, Aboitiz Equity Ventures, Inc. (AEV) senior vice-president and chief financial officer, said AboitizPower is looking for partnerships in Southeast Asia.
“We are looking outside. There is nothing really firm [at this point] but some are really good opportunities,” he said on the sidelines of a bond listing ceremony in Makati City.
While AboitizPower remains bullish locally with a number of power generation projects under various stages of development, Mr. Paradies noted that expansion in the Philippines is constrained by generation capacity limits under the Electric Power Industry Reform Act of 2001 (EPIRA).
“In the Philippines, our capacity is constrained by the EPIRA. You can only own 25% national capacity and 30% each grid,” he said.
“So we’re getting close to that [limit] in places like Mindanao. We want to grow so we have to look outside.”
AboitizPower is interested in both existing and new projects, according to the same official.
“Some are greenfield and some are operating,” Mr. Paradies said, noting that capacity may exceed 100 megawatts (MW).
He added that it takes time to venture abroad because the company needs to choose the right partner and conduct due diligence.
Mr. Paradies said a venture in the Southeast Asia would “definitely [be a] partnership.”
AboitizPower Chief Executive Officer Erramon I. Aboitiz said last May that the company was considering business opportunities in Papua New Guinea and Indonesia.
Bur Mr. Paradies said yesterday “nothing has materialized” yet in those countries.
AboitizPower aims to increase its generation capacity by 2,000 MW from the current 2,300 MW, to include new coal, hydropower and solar energy projects.
Besides power generation, the company is also in the distribution business through its subsidiaries.
These include Cotabato Light and Power Company, Inc.; Visayan Electric Co.; Davao Light and Power Co.; Subic EnerZone Corp.; and San Fernando Electric & Light Power Company, Inc.
AEV is the listed holding firm of the Aboitiz companies.
The company last January announced a capital expenditure (capex) plan of around P88 billion, up from P59 billion a year earlier.
The bulk of the capex, amounting to P78 billion, was allocated to its power generation and distribution business through AboitizPower.
The remainder was set aside for its property (Aboitiz Land, Inc.), banking (Union Bank of the Philippines, Inc.), food (Pilmico Foods, Inc.), and waste-to-fuel (Aseagas Corp.) subsidiaries.
On Wednesday, AboitizPower listed its P10-billion fixed-rate retail bonds on the Philippine Dealing & Exchange Corp.
Due in 2021, the Series A bonds carry a 5.205% interest rate per annum; while the Series B bonds due 2026 have a rate of 6.100%.
Proceeds of the issue will finance, among others, the 420-MW expansion of the Pagbilao coal-fired power plant in Quezon. The project -- scheduled to start this year -- is being undertaken in partnership with TeaM Energy Corp.
AboitizPower is also funding from the bond proceeds a 300-MW coal project in Toledo City, Cebu, which is set to be fully operational by 2018.
Two hydropower projects -- the 68-MW Manolo Fortich in Bukidnon and 14-MW Sabangan in Mt. Province -- are also expected to get a share of the proceeds. -- Claire-Ann Marie C. Feliciano source
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