MVP targets higher Meralco capex for 2025

MANILA, Philippines — Tycoon Manuel V. Pangilinan expects Manila Electric Co. (Meralco) to increase its capital spending for 2025, seeing another banner year amid a robust economic outlook.

“I believe so,” said Pangilinan, who serves as Meralco chairman and CEO, when asked if the group will allocate a higher capital expenditure (capex) budget next year.

“I think it will be a better year for Meralco next year. (I’m) quite confident (as) the economy is doing okay under President Marcos,” he said.

The company set aside close to P40 billion for its capex this year, the bulk of which was earmarked for the distribution utility and power generation businesses.

The Meralco board has yet to review the budget next year, but Pangilinan said it would be largely driven by the $4-billion Terra Solar project in Central Luzon, which is poised to become the world’s largest solar facility.

The solar farm, which consists of 3,500 megawatts of solar panels and 4,000 MW hours of battery energy storage system components, has been “in full swing in terms of capex,” he said.

The Meralco Group took over the project after acquiring a controlling stake in SP New Energy Corp. through MGen Renewable Energy Inc., a subsidiary of Meralco PowerGen Corp.

Similarly, a significant portion of the 2025 budget is also expected to bankroll the company’s investments in liquefied natural gas (LNG), which is considered a “transition fuel” amid the country’s push for a low-carbon economy.

Pangilinan has entered into a $3.3-billion trifecta deal with business tycoons Sabin Aboitiz and Ramon Ang to launch the country’s first and largest LNG facility.

The partnership first reported by The STAR involves MGen and Aboitiz Power Corp. joining forces to invest in two gas-fired power plants owned by San Miguel Global Power Holdings Corp.

“I think the plant number 2, Excellent Energy, should be operational by 2025. So, that will involve some degree of capex as well,” said Pangilinan, who is hoping to close the landmark deal this year.

As for distribution utilities, Meralco COO Ronnie Aperocho said the group plans to allocate at least P25 billion to boost the resiliency of the distribution network and electrical infrastructure.

“Right now, we have a parade of storms. So the integrity of our distribution system is really in danger if our system is not really that storm-hardened,” Aperocho said.

As of end-September this year, Meralco had already spent P26 billion for distribution network improvement projects, development of solar plants and purchase and construction of telecommunication towers.

The company reported a consolidated core net income of P35.1 billion during the nine-month period, up 17 percent from the P30 billion recorded previously.

With this solid result, Pangilinan was expecting Meralco to exceed a P43-billion profit guidance set earlier this year, paving the way for another record year of earnings.