Aboitiz Equity earmarks P78B for expansion this year
Conglomerate Aboitiz Power Corp. has earmarked P78.1 billion in capital spending this year, mostly an increase of almost 7 percent from P73 billion last year, to expand its presence in the local renewable energy (RE) space.
In a statement on Thursday, AboitizPower said around 66 percent of this year’s capital expenditure would be set aside for ramping up its RE portfolio.
The Aboitiz Group’s listed energy firm, which has operations in power generation, power distribution, retail electricity services and distributed energy, plans to expand its RE capacity to 4,600 megawatts (MW) by 2030.
The power company increased its capital outlays as some new power projects in the pipeline would go online, which could boost its profitability this year.
In an interview, AboitizPower president and CEO Danel Aboitiz noted that Wholesale Electricity Spot Market (WESM) prices have dropped as of the first quarter of this year.
“[It] essentially means supply additions are outstripping demand growth. Demand growth has been slower than expected in the first quarter. But on the flip side, we have a number of new projects coming in,” Aboitiz said.
“That’s new capacity, new megawatts … and we’ve been able to contract a good portion of our portfolio to shield us down from those low WESM prices. AboitizPower should be okay,” he added.
The Independent Electricity Market Operator of the Philippines (Iemop), which operates the WESM, reported that spot market prices averaged P5.22 per kilowatt-hour as of early March, down by more than 91 percent in the February billing period.
Iemop attributed the higher WESM prices to warmer temperatures, as the heat index reached 46 degrees Celsius in some areas of the Philippines.
WESM is the central marketplace for trading electricity as a commodity, where power generators sell excess power while distribution utilities can purchase additional power, if necessary.
LNG venture
Aboitiz also shared optimism about AboitizPower’s overall financial performance this year as new power plants would be switched on and the landmark liquefied natural gas (LNG) deal was finalized.
“A lot of the projects [have] long gestation. Beyond 2025, you should see those capacities come in,” he said, adding that its unit Davao Light and Power Co. would add another 100 MW to its franchise area.
“We have our joint venture with San Miguel and Meralco that closed in January. So that’s already contributing income. That’s an upside,” he added.
In January, power companies of tycoons Ramon Ang, Manuel V. Pangilinan and Sabin Aboitiz completed the financing for their $3.3-billion deal to build an integrated LNG facility in Batangas.
Meralco PowerGen Corp., the subsidiary of power distributor Manila Electric Co. (Meralco), San Miguel Global Power Holdings Corp. and AboitizPower’s Therma NatGas Power Inc. achieved the financial closing for the “first and most expansive” LNG plant in Batangas.
AboitizPower’s core net income reached P33.7 billion in 2024, up by 5 percent. Net income rose by 2 percent to P33.9 billion, attributing it to better performances of its generation and distribution businesses.
