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New Asian partners for Meralco

Manila Electric Co. (Meralco) is in talks with Asian companies as potential partners for its planned coal-fired power plant in Atinoman, Quezon, the power distributor’s top official said.

The Asian firms may be potential investors in the 2×600 megawatt plant, Meralco chairman Manuel V. Pangilinan said on the sidelines of an event organised by the Management Association of the Philippines.

The company has already secured funding for the project and has reached preliminary agreements with eight banks for a P107.5-billion loan.

“We’re waiting for PSA (power supply agreement) approval. We’ve already come to an agreement with the banks but we need the PSA before we finalize the agreement,” said Meralco chief finance officer Betty Siy-Yap.

In the same event, Meralco president Oscar Reyes said the power firm expects volume sales to rise 4.5 percent this year.

But this is expected to be tempered to 3.5 percent in 2018 as customers continue to implement cost-cutting measures.

For this year, the company is looking to slightly surpass its core profit, noting that the surge in sales will be tempered by the growing retail competition and ongoing developments in its power generation business.

The company has set a guidance on 2017 consolidated core net income to be a slight improvement over the amount reported in 2016, with only two months left this year but officials declined to provide the exact number.

Officials have noted that some business verticals such as retail electricity have increasingly been very competitive.

Introduced in June 2013, retail electricity is provided by retail electricity suppliers or RES which are entities authorized by the Energy Regulatory Commission (ERC) to sell, broker or market electricity to big power users or those with an average peak demand of one megawatt for 12 months.

Prior to June 2013, all these big customers were captive customers of Meralco but the introduction of RES changed that.

Meralco booked a core net income of P19.58 billion and a reported net income of P19.18 billion in 2016.

As of end-September, Meralco has registered a core net income of P15.4 billion, up three percent from last year’s P15 billion.

Reported net earnings amounted to P15.9 billion, two percent higher than last year’s P15.7 billion, data from the company showed.

I. Gonzales, PS