ABOITIZ Equity Ventures, Inc. (AEV) expects to start constructing its P14-billion Apo Agua bulk water supply project in Davao City by next month, after having secured all the necessary permits.
“The contractors have already begun site preparations. Next month we’ll start doing some constructions. We’re complete already [with the permits], ready to go na talaga (surely),” AEV Chief Finance Officer Manuel R. Lozano told reporters on the sidelines of the company’s media event in Makati City last week.
Initially expected to be operational by 2019, the company had pushed back the target completion date for Apo Agua to 2021 due to delays in securing permits.
The Apo Agua project is expected to provide 300 to 350 million liters of potable water every day, making it the largest bulk water project in the country. The water for Apo Agua will be sourced from Tamugan River, prompting the firm to build 30 to 52 kilometers of pipes to bring the water from the river to the water treatment plant.
Aside from the water treatment component, the project will also include a hydropower plant with an expected output of 2.2 megawatts (MW), which is enough to run the bulk water facility.
The project is being undertaken by Apo Agua Infrastructura, Inc., a 70-30 joint venture between AEV and J.V. Angeles Construction Corp. (JVACC). The group has also signed the bulk water supply agreement with the Davao City Water District (DCWD) back in 2015.
DCWD currently sources its supply from 60 production wells for ground water extraction. Apo Agua will serve as an alternative source of water in Davao, and will allow half of the production wells to be rested.
Mr. Lozano said financing for the project will be finalized by the end of September.
“The financing is about P9 billion, we’re getting a 15-year loan for that. We’re funding the remainder using our equity,” Mr. Lozano said.
Funding for AEV’s Apo Agua project forms part of its P77-billion allocation for capital expenditures in 2018.
Bulk of the capital for the year will fund the listed conglomerate’s power unit, Aboitiz Power Corp. at P60 billion. This is in line with the company’s target to add 500 MW of installed capacity by year end.
AEV’s food, cement, and land segments will each receive around P4-5 billion, while the balance will go to Union Bank of the Philippines for its investments in technology.
The conglomerate recorded a net income of P10.1 billion in the first six months of 2018, 2% lower year-on-year after suffering from non-recurring foreign exchange losses on its dollar-denominated debt. Meanwhile, gross revenues went up by 16% to P83.4 billion during the period. — Arra B. Francia