Meralco considers loans to finance projects
THE Manila Electric Co. (Meralco) is assessing its financial situation to determine if it can borrow money this year to finance its energy projects.
“Yes, we are already reviewing our cash requirements given capex. We are looking to do something within the year,” said Betty Siy-Yap, senior vice president and chief financial officer of Meralco.
The company could borrow money “around the third quarter” but the leader of Meralco did not specify an amount.
Meralco previously announced during its first-quarter financial results presentation that consolidated interest-bearing debt amounted to 86 billion pesos, of which 33.9 billion pesos matures in one year. The amount includes the debt of the subsidiaries amounting to 45.3 billion pesos.
The company is also seeking regulatory approval for its proposed Annual Revenue Requirement (ARR) and Performance Incentive Program (PIS) for the fifth regulatory period (5RP).
Meralco has proposed 149.66 billion pesos for its capital expenditure (capex) program over the next four years.
Under the proposed ARR and PIS for the 5RP which begins July 1 and ends June 30, 2026, Meralco has set a capital budget of 37.53 billion pesos for 2023, 43.5 billion pesos for 2024, 36.37 billion pesos for 2025, and 32.25 billion pula for 2026.
Meralco stated that the proposed amount is necessary to comply with regulatory requirements to maintain the integrity, reliability and efficiency of the electrical system, and for the continuous improvement of service quality and performance measurement at benefit of consumers.
The company also said the capital projects are needed to increase network capacity to meet demand growth or new customer requirements.
Among other things, capital expenditures will be used for the replacement and renovation of aging and obsolete assets, the relocation of assets necessary for the implementation of government infrastructure and projects initiated by third parties, the purchase and construction of off-grid assets necessary for normal efficient operation of the electrical distribution system and deployment of automation and technology projects.
For the 5RP, Meralco proposes 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 network”.
Meanwhile, Meralco’s senior vice president and chief regulatory affairs officer, Jose Ronald Valles, said the utility company will conduct two more tenders this year.
“There are communication service providers [Competitive Selection Process] that we will experience this year. These are the 500MW at half merit; and another is the 600 MW base load – which is based on the PSPP [power supply procurement plan] schedule that we submitted to the DOE [Department of Energy].”