Aboitiz Power allocates P8.24B for projects till ’08

Aboitiz Power Corp. (APC) is spending about P8.24 billion for new and expansion projects of its subsidiaries until 2008.

In a prospectus submitted ahead of its stock market listing on Monday, APC said it has budgeted P2.811 billion for capital expenditures this year, the bulk of which, or P1.142 billion, will be set aside for its hydro-electric power development subsidiary Hedcor’s 42.5-megawatt (MW) Sibulan power project.

Scheduled for completion in 2009, the Sibulan power facility will consist of two run-of-river hydroelectric plants located southwest of Davao City.

The project, with a total cost of about P5 billion, would include construction of access roads and putting up of transmission facilities.

The 2007 budget will also include the expenditures of APC’s power distribution subsidiaries such as Visayas Electric Co. Inc. (VECO), the largest privately-owned distribution utility in the country after Manila Electric Co. (Meralco).

About P594 million will go for the upgrade of VECO’s facilities to be able to provide better services to customers within its franchise area.

APC is also putting in some P434.6 million for Davao Light and Power Co. (DLPC), one of its subdiaries involved in power distribution.

Aside from DLPC, APC will also be spending P72.9 million for Cotabato Light & Power Co. (CLPC); P140 million for San Fernando Electric Light and Power Co. Inc. (SPELAPCO) and P156.4 million for Subic Enerzone Corp. (SEZ).

On top of its investment for Sibulan project, APC will also be pouring in a total of P270 million for its generation companies.

In 2008, APC is alloting most of its capex for the Sibulan hydro facility at P2.241 billion and P1.863 billion for the 30.5-MW Tamugan-Suawan hydro pro-ject, both located in Davao City.

The Tamugan-Suawan project is expected to be completed by 2010 and is estimated to cost P4.2 billion, including the construction of transmission facilities.

The two new power plant projects have been able to secure tax perks from the Board of Investments, including a six-year income tax holiday and reduced import duties on capital equipment.

For next year, APC will allocate another P500 million for VECO and P444 million for DLPC.

The rest of the budget for 2008 would be poured in for the projects of its other subsidiaries.

“The company expects to fund its budgeted capital expenditures principally through proceeds of the initial public offering and cash from operations, as well as through borrowings,” APC said.