Aboitiz unit seeks to put up 300-MW coal plant

Aboitiz Power Corp. is planning a 300-megawatt (MW) coal-fired power plant in Toledo City, Cebu, as part of a P190-billion investment plan that will increase the company’s attributable capacity by 50 percent to 3,500 MW in five years.

In a briefing with reporters on Thursday, Aboitiz Power CEO Erramon Aboitiz said the Cebu facility remained under study but should it proceed according to schedule, the power plant would be operational by the end of 2016.

It is also building a 300-MW facility in Mindanao, which it expects will be operational by the first quarter of 2015.

The company also expects to start building two additional power facilities: the 600 MW plant in Subic and another 400-MW power plant in Pagbilao, Quezon.

“We envision that our growth will come from new projects that will be needed to supply the expected increase in demand brought about by strong economic activity,” Aboitiz said.

Aboitiz said of the P190-billion investment, the company will need to put up about P125 billion.

Aboitiz Power accounts for over 60 percent of earnings of parent firm Aboitiz Equity Ventures Inc. (AEV), which is also involved in banking, food and real estate.

Still, the company is keen on diversifying its revenue stream. It acquired last year from an affiliate Aboitiz Land, which has an inventory of existing and potential projects, the company said in its statement.

“Aboitiz Land will continue to roll out more residential projects and expand its industrial zone business,” the company said.

Aboitiz Land recently signed a joint venture deal with Ayala Land Inc., which the latter says will involve the development of a new business district in Cebu.

The Aboitizes have also partnered with the Ayala Group for big-ticket infrastructure projects.

AEV and Ayala Corp. are jointly bidding for the P17.5-billion contract to rehabilitate, expand and operate the Mactan Cebu International Airport.

“It provides us with the opportunity to enter into a new business segment with significant growth potential that is crucial to developing the country’s transportation infrastructure and tourism potential,” Aboitiz said.

AEV also owns Union Bank and thrift bank City Savings as well as Pilmico Foods.

The conglomerate earlier reported that net income in the first quarter rose 17 percent to P6.8 billion, with gains bolstered by one-time gains.

Excluding non-recurring movements, AEV said its consolidated net income for the three-month period would have stayed flat at P5.5 billion, or just 1.3-percent up from the year before.

Of the total earnings contributions from its business units, the power business accounted for 62.1 percent, while the income contribution of the banking, food and property operations were at 31.5 percent, 5.7 percent, and 0.7 percent, respectively.