By James A. Loyola
Alsons Consolidated Resources’s expanding power business is seen to benefit from plans to interconnect the Visayas and Mindanao power grids as well as the opening of the electricity spot market in the south.
Once completed, the Mindanao-Visayas Interconnection Project (MVIP) will enable ACR to sell its capacities to Visayas and Luzon, noted Philippine Rating Services Corporation (PhilRatings).
Meanwhile, the launch of the Wholesale Electricity Spot Market (WESM) in Mindanao will serve as an avenue for the sale of ACR’s uncontracted capacities in Mindanao and may also help address the oversupply situation in the region.
Taking this into consideration, PhilRatings assigned an Issuer Credit Rating of PRS A plus (corp.), with a Stable Outlook, to ACR for its ₧1.5 billion Commercial Papers (CPs) issued for the partial funding of its various hydroelectric power projects (HEPPs).
A company rated PRS A (corp.) has an above average capacity to meet its financial commitments relative to that of other Philippine corporates but is somewhat more susceptible to adverse changes in circumstances and economic conditions than higher-rated corporates.
ACR’s rating reflects the positive growth prospects for Mindanao, along with development projects that are supportive of the growth of the region’s power industry.
PhilRatings also noted ACR’s ability to establish joint ventures with strong partners for particular projects and its planned expansion projects which will further diversify its generation mix.
It also factored in ACR’s positive cash flows and improving, but still volatile profitability; and the challenges encountered in securing bilateral contracts for its diesel power plants.
At present, the Company has four operating power plants in Mindanao, with a total power capacity of about 363 MW.
With its various projects in the pipeline, the Company is expecting to add about 320.3 MW to its current capacity.