Aug. 15 (Bloomberg) -- Aboitiz Power Corp., the Philippines’ third-largest utility, will spend 120 billion pesos ($2.85 billion) over the next three years to boost generating capacity to combat power shortfalls in some parts of the country.
Aboitiz will partner with other companies to build plants with capacity of about 1,350 megawatts. It will directly own 700 megawatts, increasing its portfolio by 30 percent to 3,050 megawatts, President Erramon Aboitiz said in an interview. It also plans to bid for power assets to be sold by the government, he said.
The southern Philippine island of Mindanao has been experiencing power outages and the region relies heavily on hydroelectric plants. The deficit in Mindanao ranges from between 50 megawatts and 300 megawatts a day, according to a Department of Energy circular in March.
“There’s a lot of opportunity for us,” Aboitiz said of Mindanao, where the company is building a 300-megawatt coal-fired power plant. “No new major capacity has been built for quite some time and you have the overall dependence on hydro. We felt that it was important to rectify the balance by building coal.”
Aboitiz plans to bid for several state power plants with combined capacity of more than 1,400 megawatts, he said. The Philippines has sold most of its power assets to cut debt and get out of the capital-intensive industry.
Profit at the company rose 20 percent to 6.58 billion pesos in the second quarter, the biggest percentage growth in more than a year, according to Bloomberg data. Earnings will likely be less volatile as the company sells less to the spot market in favor of long-term supply contracts, Aboitiz said.
Aboitiz Power has risen 16 percent this year against the Philippine benchmark stock index’s 20 percent advance. It was up 0.3 percent as of the noon break in Manila.
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