ABOITIZ Equity Ventures Inc. (AEV) has set aside P58.4 billion for capital spending this year, with the lion’s share again going to its flagship power business.
“Each of our businesses has the potential for higher financial return and growth as well as sufficient scale and capability to deliver long-term value for all our stakeholders,” AEV president and chief executive Erramon Aboitiz said in a statement.
This year’s capital spending budget is not far from the P60 billion allocated in 2015.
Aboitiz Power, which accounts for 75 percent of the group’s business, has earmarked P52 billion for capital expenditures this year. This is in line with its commitment, along with its partners, to increase total power generation capacity to 4,000 megawatts (MW) by 2020.
Aboitiz Power aims to launch its first solar power project in San Carlos City, Negros Occidental, within the first quarter of this year.
Last January, Aboitiz Power inaugurated the 300-MW Therma South Inc. baseload plant in Davao, providing the much-needed capacity to the Mindanao grid. The first unit of the new plant started operations in September last year while the second unit began full commercial operations last Tuesday.
Other ongoing construction projects include the 68-MW Manolo Fortich hydropower plant in Bukidnon, the 8.5-MW hydropower plant in Isabela, the 300-MW Therma Visayas baseload plant in Cebu and the 400-MW Pagbilao III expansion in Quezon province.
Aboitiz Power has also identified roughly 200 MW of potential run-of-river power projects located across the archipelago for the next five years. Run-of-the-river hydroelectric power plant operation involves “borrowing” some river water to turn its kinetic energy into electricity and returning the same unpolluted water back into the river. Like other renewable power technologies, it is deemed economical as it depends on the free energy of nature as fuel.
Meanwhile, AEV’s banking and financial services companies will have a combined capital spending budget of P968 million. Some P871 million had been set aside for Union Bank’s initiatives geared to push growth in customer businesses supported by loan expansion.
Another P97 million was budgeted for the branch expansion of remittance arm Petnet Inc. as well as the lending program of City Savings Bank. AEV entered the money transfer business last year by acquiring a majority stake in Petnet, the biggest Western Union agent network in the Philippines.
The group’s food unit Pilmico is expanding its customer reach in the Southeast Asian region while diversifying operations in the country. As such, this unit has allocated P2.3 billion this year to support various initiatives for its flour, feeds and farms divisions as well as to pursue expansion opportunities in the region.
Property arm Aboitiz Land is spending P2.7 billion to acquire more industrial and residential land as it continues to expand its business outside of Cebu as it aspires to be a major player in the national arena.