Aboitiz Power Corp. may spend $2.8 billion on new projects

MANILA, Philippines - Aboitiz Power Corp. (APC) may spend $2.8 billion should it decide to put up additional 1,400 megawatts (MW) of new capacities into the system.

“We still have plenty of room to expand. We still have more than 1,000 MW in Luzon, and then nationwide around 1,400 MW. In Mindanao, our capacity there is very small at this point,” Erramon Aboitiz, APC president and CEO, said.

He said they do not have exact investment figures yet on these projects but if they would develop the 1,400 MW which the company is still allowed to build under the existing rules on capacity cap, they may have to spend about $2.8 billion.

As a rule of thumb, a company will spend about $1.5 million to $2 million per MW to put up a power facility.

Aboitiz pointed out that they do not follow any timeline for these additional capacities. “We don’t really have timetable, it’s just that that’s what we’re allowed by law and if the opportunities are there we would like to pursue it,” he said.

Aboitiz group’s market share is estimated to be 15 percent in Luzon, seven percent in the Visayas, 15 percent in Mindanao and 14 percent for the national grid.

The Aboitiz group gained competitive edge in the three grids with its acquisition of the 747-MW Tiwi-Makban geothermal plants, 360-MW Magat and 175-MW Ambuklao-Binga hydrop plant, 100- Power Barge 117 and 100 MW PB 118 and the administration of Napocor contract in the 764-MW pagbilao coal-fired power plant.  

Under Section 45 (a) of the Electric Power Industry Reform Act (EPIRA), no company or related group can own, operate or control nor more than 30 percent of the installed generating capacity of a grid and/or 25 percent of the national installed generating capacity.

The Aboitiz executive said they would be expanding their capacities by building new plants and pursue the bid for National Power Corp. (Napocor) assets. “We’re still interested in acquiring so it depends whether we’re able to do that,” he said.

The group, he said, is eyeing a number of Napocor assets that are set to be privatized by the Power Sector Assets and Liabilities Management Corp. (PSALM).

“We’re still interested in Unified Leyte. We’re interested in the hydros of Napocor whether it be CBK (Caliraya, Botocan and Kalayaan) or the ones in Mindanao, Agus if they sell it,” he said. He said, “We’re just waiting for PSALM  to continue the privatization process.”

 The Aboitiz official added that they would also be expanding their existing power plants in the Visayas and Mindanao. “We want to basically, together with our partners in Steag, to expand the plant there. We want to put another unit or two right beside the plant, in Phividec and then we’re also looking for site to build one in Davao to supply southern Mindanao,” he said.