Meralco eyes 2 Nigerian power firms

MANILA, Philippines - The country’s biggest power retailer Manila Electric Co. (Meralco) together with its consortium partners in Nigeria is expected to take over two power firms in the African country by the third quarter of the year, top company officials said.

“The consortium wants to take over by the third quarter of the year,” Meralco president Oscar Reyes said in an interview.

The consortium, led by Lagos-based Integrated Energy Distribution and Marketing Ltd. (IEDM), tapped Meralco as technical partner for two power firms privatized by the Federal Republic of Nigeria.

“We partnered with IEDM. It is essentially a technical service agreement because IEDM doesn’t have any background experience in distribution. This is for two distribution utilities in Nigeria,” said Meralco chairman Manuel V. Pangilinan.

He said representatives from the consortium are expected to come to the Philippines within the next few days to thresh out other necessary details pertaining to the deal.

Pangilinan said Meralco has taken a five percent equity in IEDM, amounting to $31,500, and was given the option to raise its stake to up to 20 percent.

“We are open to (raising to 20 percent) but we’d like to take a look at it on the point of view of being more as a service provider to IEDM,” he told reporters, adding that Meralco isn’t prepared yet to make “significant” investments in Nigeria.

Nevertheless, Meralco views the deal in Africa as a way to bring the power retailer brand overseas.

“We are looking at it as a platform to having Meralco recognized overseas,” Reyes said.

He said IEDM approached Meralco in 2011 after it was referred by a European advisory firm.

“We were referred to them by a major European energy advisory company. Then they came over. They liked what they saw and asked us to be their technical partner,” he said.

Pangilinan said that if Meralco decides to raise its investments in Nigeria, it wouldn’t be as significant as its Singapore deal.

Early this month, Meralco completed the purchase of a 70 percent stake in an 800-megawatt liquefied natural gas project in Singapore for $488 million.

Meralco subsidiary PowerGen Corp. and First Pacific Co. Ltd. have formed a joint venture, FPM Power Holdings Ltd. (FPMP) to acquire 70 percent of GMR Energy (Singapore).

The remaining 30 percent is owned by Malaysian energy giant Petronas.