Meralco sets P12-B capex

MANILA, Philippines - The Manila Electric Co. (Meralco) has set a capital expenditure (capex) budget of P11.889 billion, and it may have to tap the capital markets to fund its spending requirements.

 “Funding of capital expenditures will be sourced substantially from internally generated cash flow and borrowings from local and foreign financial institutions,” it said in its quarterly report.

Of the total capex, P8.9 billion has been allocated for electric capital projects and P2.96 billion for non-electric projects and other capitalized items.

The capex is geared to support projects in areas with large concentration of core customers, gives priority to correction of normal deficiencies in the system, stretch loading limits of its facilities and initiate practical and cost-effective projects to correct system deficiencies.

Meralco said that its program expenditures would be for building and maintaining its network to meet minimum performance and service requirements, “and in any event to make capital expenditures in each quarter at least equal to the amount of depreciation taken in the prior years.”

Most expenditure on transmission and substation projects, supervisory control and distribution automation, and distribution line projects are non-discretionary, it said.

The remaining capital expenditure is discretionary, which encompasses allocation projects, telecommunications projects and other non-electrical capital expenditure.

 “If the actual peak demand is lower than the forecasted demand, a portion of the non-discretionary capital expenditure may become discretionary,” Meralco added.