MANILA, Philippines – AboitizPower, the holding company for the Aboitiz Group’s power generation, distribution and retail businesses, will be pouring in P85 billion over the next four years to expand its power portfolio, its top official said yesterday.
“For the next four years, AboitizPower and partners expect to invest P85 billion which will be used in building new power plants across the country,” AboitizPower president and chief executive officer Erramon Aboitiz said during a presentation yesterday at the Philippine Economic Briefing.
Aboitiz said the amount would translate to roughly 1,400 to 1,500 megawatts of additional capacity and will combine AboitizPower’s and its respective partners’ investments in RP Energy, Pagbilao 3 coal-fired plant expansion, the Therma South coal plant in Mindanao and roughly three to four hydropower plants.
RP Energy is a consortium of AboitizPower, PowerGen Corp. and Taiwan Cogeneration International Corp.
For the Pagbilao 3 expansion, AboitizPower has teamed up with TeaM Energy Corp. for the construction of another 400-MW plant.
“We’re planning on building a 400-MW plant. We hope to break ground this year, hopefully in the second half and to have that ready by 2016,” Aboitiz said.
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Wholly-owned subsidiary Therma South Inc., meanwhile, is completing a 300-MW coal power plant in Mindanao and expects this to be ready by early 2015.
For the hydropower plants, AboitizPower is looking at building around three to four new plants in the next three to four years.
“In the next three to four years, we’re looking at adding a little over 100 MW of mini-hydro. We’re looking here in Luzon, Negros and also some more in Mindanao. We don’t have a particular approved site at this point,” Aboitiz said.
Of the P85 billion, AboitizPower will be shelling out P35 billion to build new power plants in Mindanao within the next three years.
“Hopefully, this will put an end to the acute power shortage in Mindanao,” Aboitiz said.
To raise the funding requirements, Aboitiz said the company would undertake a combination of loans and equity financing.
“Normally what we do in projects like this is we get some project financing from the banks of about 70 percent and the balance is the equity that we put in as AboitizPower,” Aboitiz said.
He said it is important for the government to realize the importance of coal in addressing the power shortage amidst strong opposition from environmental groups against the use of coal to fire power plants.
When used responsibly, coal is very effective in meeting power requirements, Aboitiz said.
He likewise expressed optimism on the improving economic environment, noting that investments would continue to pour in with the sustained improvement in the business climate.