Meralco eyes P3B to fund 2012 capex

Manila Electric Co., the country’s biggest power distributor, plans to raise around P3 billion to help finance its expenditures next year, according to company chief operating officer Oscar Reyes.

In a phone interview, Reyes said the amount would be used to help finance “general corporate purposes,” including its capital expenditure program for the third regulatory period covering 2011 to 2015, under the performance-based rate (PBR) mechanism.

Last week, Meralco told the Philippine Stock Exchange that its board of directors had authorized management to “negotiate a financing facility with one or more financial institutions.”

The move, according to Reyes, is meant to help Meralco comply with the capital spending required under the third regulatory period, during which the distribution utility expects a much lower capital spending figure of only P37.2 billion, as against its earlier proposal of P45 billion over the next four years.

In June this year, Meralco senior vice president and chief finance officer Betty C. Siy-Yap said the company planned to raise some P9 billion to pay for the 30-percent equity portion of a proposed 300-megawatt coal-fired power plant to be put up in Subic.

At present, Meralco has been investing heavily to improve its power distribution network through the construction of new power facilities, substations and lines throughout its franchise area. It is also pursuing plans to build a $2.3-billion, 1,500-megawatt power generation portfolio within four to five years’ time, or depending on estimated power demand.

Earlier this year, Meralco PowerGen Corp., a subsidiary of Meralco, acquired a majority stake in Redondo Peninsula Energy Inc., which will build a 600-MW coal-fired facility in Subic.