Aboitiz prepares to raise funds for 3 projects

MANILA, Philippines -  The Aboitiz Group is preparing to raise debt to fund three coal-fired power plants with an estimated cost of $3.6 billion.

Aboitiz Equity Ventures chief finance officer Stephen Paradies told reporters they are finalizing project financing for three plants located in Davao, Subic and Quezon. 

Paradies said the company is likely to fund 75 percent of the required total investment for the three power facilities from the local debt market.

 “We hope to close a deal with banks for at least one project before the year ends,” he said. The balance of the required investment will come from equity.

Paradies said AEV had cash of around P30 billion as of end-June this year.

The planned 300-megawatt coal-fired power plant that will be built by Aboitiz Power subsidiary Therma South in Davao is expected to cost around $650 million.  The group plans to secure P18 billion to P20 billion in debt to fund the project.

For the 600-megawatt facility in Subic, a joint venture with power utility giant Manila Electric Co. and Taiwan Cogeneration through Redondo Peninsula Energy Inc., Aboitiz Power intends to borrow P36 billion to P40 billion to fund its 25-percent share.  The project will cost about $1.2 billion.

Aboitiz Power may also have to raise $600 million for the 400MW expansion of its coal-fired power plant in Pagbilao, Quezon.  Cost per megawatt is $2 million for a total project cost of about $800 million.

Paradies said the company is confident it would at least match last year’s financial performance after posting good first semester results that saw a 16-percent rise in net income.

Aside from power generation and distribution, the Cebu-based Aboitiz clan also has interests in banking, food production and real estate development.