AEV spending P50B in ’18 for power, infra projects

Conglomerate Aboitiz Equity Ventures (AEV) expects to spend up to P50 billion in the coming year to complete new power generation projects and jump-start new infrastructure-related initiatives.

AEV chief financial officer Manuel Lozano said that in 2018, about 500 megawatts (MW) of attributable capacity would be added to the group’s portfolio with the completion of new plants in Pagbilao.

This year, AEV is completing the 340-MW Therma Visayas baseload power plant in Toledo, Cebu, 400-MW Pagbilao Energy Corp. plant expansion and the 68.8-MW Manolo Fortich hydroelectric power plant in Bukidnon.

Excluding the interest attributable to partners in Pagbilao and Therma Visayas, the net increase in installed capacity for AEV will be 500 MW which will bring to 3,500 MW its total attributable power generation capacity nationwide. This will be equivalent to around 18 percent of the national grid, Lozano estimated.

The increase in coal taxes recently approved by Congress would have some impact, but Lozano said most of the group’s contracts allowed such costs to be passed through consumers.

“There are other different and more effective ways of reducing CO2 (carbon dioxide) than providing coal tax but if the goal is to raise money, demand is there already, so it will have an impact,” he said.

The bicameral conference committee recently raised the coal excise tax rate from P10 per metric ton to P50 per metric ton in the first year of implementation, P100 in the second year, and P150 in subsequent years. The final excise tax rates were halved from the original proposal in the Senate version.

For capital spending next year, Lozano said the budget would range between P40 billion and P50 billion, mostly for the power projects to be completed.

Another likely big component to AEV’s capital spending next year will be the start of the Apo Agua Infrastructura Inc., a joint venture with J.V. Angeles Construction Corp. to build one of the country’s largest private bulk water supply projects. This project will provide Davao City with 300 million liters of water per day sourced from the Tamugan River, seen to benefit Davao City’s one million residents, by end-2019 or early 2020.