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MANILA, Philippines – The country’s biggest power retailer, Manila Electric Co. (Meralco), is considering increasing its stake — to up to 20% from 5% — in a consortium that won the right to distribute power in Nigeria.
“We are open to it but it depends on the exact nature of viability of investment,” Meralco chairman Manuel Pangilinan said at the power firm’s annual stockholders meeting on Tuesday, April 22.
“We’d like to take a look at it on the point of view of being more on a service provider to IEDM (Integrated Energy Distribution and Marketing Ltd.),” he added, referring to the consortium that is 40% owned by the Nigerian government.
Meralco joined the consortium as a technical partner of IEDM and with a 5% stake valued at $31,500.
“IEDM doesn’t have any background experience in distribution system. This is for two distribution utilities in Nigeria…We’ve been given an option to purchase 5% carried interest in IEDM and a further option if we wish to go up to 20%,” said Pangilinan.
“The consortium has been awarded and the consortium is expected to take over the areas that they’ve won by the third quarter of the year. We’re still in discussions to finalize exactly the shape of the technical partnership. There’s a team coming over this week from IEDM,” added Pangilinan.
IEDM officials are expected to arrive in the Philippines this week to thresh out and finalize details of the agreement, including the terms of the option.
Should Meralco take the offer to further acquire more stake, Pangilinan said the amount of investment wouldn’t cost as much as the $488 million deal a unit of Pangilinan-led First Pacific Ltd recently sealed to acquire a 70% stake in a liquefied natural gas (LNG)-fired power plant in Singapore.
Meralco’s investment in Nigeria will increase the utility firm’s footprint overseas. “It’s exposure to offshore operations and provides employment. It will also be income accretive to us,” Pangilinan replied when asked how Meralco will benefit from the deal. – Rappler.com
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