Meralco investing P86B over the next 5 years

Manila Bulletin
by James Loyola
November 10, 2014

Tokyo–Manila Electric Company is allotting P86 billion in capital expenditures in the next five years (2015-2019) for the expansion of its electricity distribution network and its investment in the power generation business.

In a press briefing, Meralco President Oscar Reyes said Meralco is spending P65 billion for its distribution business and P21 billion for its share in capex of power generation plants where is has invested in.

Reyes said capex will be for “building robust platforms, including automation, technology and innovation, to further enhance service and meet future growth of customers, businesses and communities.”

Reyes said Meralco’s planned P65 billion investment in its distribution network and customer service infrastructure is will be 30 percent higher than the P50 billion is has allotted for the previous five year program (2010-2014).

He explained that the heavy capex is needed to meet increasing peak demand (6,121MW in 2014), growing customer base (5.56 million this year), and sourcing and delivering higher energy volumes (34,950 Gwh in 2014).

It will also help the utility drive down system loss and boost customer service while containing the generation charge, said Reyes.

These will include the development of 11 distribution substations and two delivery points substations as well as the expansion of 10 distribution substations and two delivery point substations.

From 2015 to 2019, Meralco will also construct four new sub-transmission lines, install facilities to serve new customers (transformers, poles, meters), and convert 80 non-standard voltage distribution lines to standard primary distribution voltage.

It will also install new facilities or strengthen existing infrastructure to make the distribution system less susceptible to damage from increasingly extreme weather events due to climate change.

Reyes said Meralco currently has a power generation portfolio that will cost total of P255 billion to develop although its equity interest will translate to an investment of only P21 billion since the projects will be require only 25 percent equity while the remaining 75 percent will be financed by borrowings.

For 2015, it will invest P1.6 billion, P2.5 billion in 2016, P7.8 billion in 2017, P7.2 billion in 2018 and P2 billion in 2019. source