Meralco eyes loans to bankroll projects

BY LENIE LECTURA – MAY 3, 2022
from Business Mirror

THE Manila Electric Co. (Meralco) is assessing its financial position to determine if it can borrow money this year to fund its power projects.

“Yes, we are currently reviewing already our cash flow requirements given the capex. We’re looking to do something within the year,” said Meralco Senior Vice President and Chief Finance Officer Betty Siy-Yap.

The company could borrow money “towards the third quarter” but the Meralco executive did not specify an amount.

Meralco earlier reported during the presentation of its first quarter financial results that consolidated interest-bearing debt stood at P86 billion, of which P33.9 billion are maturing within one year. The amount includes the debt of subsidiaries amounting to P45.3 billion.

The company is also seeking regulatory approval of its proposed Annual Revenue Requirement (ARR) and Performance Incentive Scheme (PIS) for the Fifth Regulatory Period (5RP).

Meralco proposed P149.66 billion for its capital expenditure (capex) program in the next four years.

Under the proposed ARR and PIS for the 5RP which starts on July 1 and will end on June 30, 2026, Meralco has set a capex budget of P37.53 billion for 2023, P43.5 billion for 2024, P36.37 billion for 2025, and P32.25 billion for 2026.

Meralco said the proposed amount is necessary to comply with regulatory requirements to maintain the integrity, reliability and efficiency of the electric system, and for the continuous improvement in service quality and performance measurement for the benefit of the consumers.

The company also said the capex projects are necessary to augment the capacity of the network to meet demand growth or new customer requirements.

Among others, the capex will be utilized for the replacement and refurbishment of aging, and obsolete assets, relocation of assets needed for the implementation of government infrastructure and third-party initiated projects, purchase and construction of non-network assets required for the normal efficient operation of the electric distribution system, and deployment of automation and technology projects.

For the 5RP, Meralco is proposing the “implementation of its Advanced Metering Infrastructure program for more than 2 million customers aligned with the objective of deploying a reliable, efficient, and intelligent distribution grid.”

Meanwhile, Meralco First Vice President and Head of Regulatory Affairs Jose Ronald Valles said the utility firm will conduct two more competitive biddings this year.

“There are some CSPs (Competitive Selection Process) that we will undergo this year. These are the 500MW mid-merit; and another one is the 600MW baseload – that’s based on the PSPP (power supply procurement plan) timeline that we have submitted to the DOE (Department of Energy).”