Taguig—(PHStocks)—High hopes on promising growth prospects for the year led Aboitiz Equity Ventures (PSE: AEV) to allocate PhP58.4 billion in capital expenditure (capex) in 2016, bulk of which will be used for its power expansion projects.
“Each of our businesses has the potential for higher financial return and growth, as well as sufficient scale and capability to deliver long-term value for all our stakeholders,” said AEV President and CEO Erramon Aboitiz.
Comprising about 75% of the Group’s business, Aboitiz Power Corp. (AboitizPower, PSE: AP) capex is pegged at PhP52 billion for the year and remains committed, along with its partners, to increase total capacity to 4,000 MW by 2020.
AboitizPower aims to launch its first solar power project in San Carlos City, Negros Occidental within the first quarter of 2016.
Last January, it inaugurated the 300-MW Therma South Inc. baseload plant in Davao, providing the much-needed capacity to the Mindanao Grid. Unit 1 started operations in September last year while Unit 2 started full commercial operations last Tuesday.
Other ongoing construction projects include the 68-MW Manolo Fortich hydropower plant in Bukidnon, 8.5-MW hydropower plant in Isabela, 300-MW Therma Visayas baseload plant in Cebu, and the 400-MW Pagbilao III expansion in Quezon Province.
AboitizPower also identified roughly 200 MW of potential run of river power projects located across the archipelago for the next five years.
Meanwhile, AEV’s banking and financial services companies will have a combined capex of PhP968 million – PhP871 million allocation for Union Bank of the Philippines Inc.’s (PSE: UBP) initiatives geared to push growth in customer businesses supported by loan expansion, PhP97 million for its newest remittance business PETNET for its branch network expansion, and full-blown execution of the loan origination program on behalf of CitySavings Bank.
The Group’s food unit Pilmico is expanding its customer reach in ASEAN while diversifying operations in the country. To this end, it has allocated PhP2.3 billion for the year in support of various initiatives for its flour, feeds, and farms divisions, as well as pursuing opportunities in the region.
On the other hand, AboitizLand is spending PhP2.7 billion to acquire more industrial and residential land, as it continues to expand its business outside of Cebu, and onto the national arena.