Century-Old Philippine Group to More Than Double Power Capacity

(Bloomberg) -- Aboitiz Equity Ventures Inc., a 102-year-old Philippine conglomerate and one of the nation’s largest power producers, plans to more than double its generation capacity to help tap a revival in consumer demand.

The Cebu-based company is targeting 9,200 megawatts by 2030, adding to the existing capacity of over 4,000 megawatts, President and Chief Executive Officer Sabin Aboitiz, 58, said in an interview with Bloomberg Television’s Yvonne Man. With a ban on new coal-fired plants, the group is looking at a mix of gas and renewables for the expansion, he said. 

“There’s a lot of opportunity we’re seeing on gas because that’s the cleanest as a base load,” Aboitiz said. Japanese utility JERA Co., which in 2021 bought a 27% stake in unit Aboitiz Power Corp., will help with the conglomerate’s “gas direction” mostly in the main Luzon island, he said.

Founded by the son of a Spanish settler in the late 1800s as a hemp-trading venture and formally incorporated in 1920, Aboitiz has now grown into a group with businesses spanning banking, food and infrastructure. As the $361 billion Philippine economy rebounds from the Covid-19 pandemic, the conglomerate is counting on the recovery to spur electricity consumption. The Southeast Asian nation is aiming for at least a 6% annual growth in gross domestic product in the next six years.

The company is also making an aggressive push into renewables, riding on a government program to have 15,304 megawatts renewables-based capacity by 2030, nearly triple from 2010. The target eventually is to have half the capacity in renewables, the executive said, adding it’s seeking to build geothermal, solar and wind plants, while expanding the group’s hydro power capacity from 1,500 megawatts. 

The conglomerate is looking at countries like Vietnam to set up power projects, and is scouting for partners, Aboitiz said. 

Aboitiz is also seeking to reduce its dependence on energy by stepping up its other ventures such as water, telecommunications towers, property and data businesses. Power now accounts for 85% of the group’s revenue. By 2030, he wants power, banking and infrastructure to contribute 25% each. 

“We’ve been transforming for years,” Aboitiz said. “But now the speed of change is happening so quickly. We want to transform from a hundred-year-old man to a 25-year-old athlete.”

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