2007 ANNUAL REPORT Power Corporation - Aboitiz Equity Ventures

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F R O M Y O U R S V P - P O W E R G E N E R A T I O N G R O U P Inside the SN Aboitiz Power trading room Luis Miguel O. Aboitiz SENIOR VICE PRESIDENT POWER GENERATION GROUP The generation business contributed 2.6 billion, 213% higher versus the previous year as attributable capacity grew by 200% as a result of major acquisitions made during the year. Dear Shareholders, The generation business contributed 2.6 billion, 213% higher versus the previous year as attributable capacity grew by 200% from major acquisitions made during the year. Our attributable capacity (proportionate megawatt capacity based on the company’s interest in each generating entity) grew from 164 MW in 2006 to 490 MW in 2007 as a result of successful bids in the government’s privatization program and private acquisitions. These additions were the 360-MW Magat hydro power plant (in which our effective interest is 50%); the 70-MW Cebu Private Power Corporation (CPPC) thermal plant (60%); the 50-MW East Asia Utilities Corporation (EAUC) thermal plant (50%), and the 232-MW coal-fired power plant of STEAG State Power Inc (34%). AP’s total equity investments for these new assets amounted to US$271 million. Generation plant / Utility SN Aboitiz Power- Magat Installed Capacity (MW) AP ownership (%) AP’s Total Attributable Capacity (MW) Fuel Type 360 50 180 Hydro Luzon Hydro Corp. 70 50 35 Hydro Hedcor, Inc. 38 100 38 Hydro Western Mindanao Power 100 20 20 Oil Southern Philippines Power 55 20 11 Oil Cebu Private Power Corp. 70 60 42 Oil East Asia Utilities Corp. 50 50 25 Oil Davao Light 53 100 53 Oil Cotabato Light 7 100 7 Oil Steag State Power 232 34 79 Coal Total 1,035 490 By the end of 2007, AP’s generating plants had a total installed capacity of 1,035 MW, of which 490 MW was attributable to the company. Out of said attributable capacity, 253 MW or 52% were hydro assets. This makes the company the largest conventional hydro power developer and operator in the Philippines. Income from the generation business increased by 213%, from 829 million in 2006 to 2.6 billion in 2007, while power sales grew 176% from 369 GwH to 1,018 GwH. Hedcor, Inc. (Hedcor) earned 160 million in 2007, up 305% from 2006. Despite a 3.9 MW reduction in the company’s generating capacity after the Asin plants were returned to the City of Baguio in December 2006, Hedcor plants managed to generate 162 GwH of electricity, up by 2.4%. The total installed capacity of Hedcor plants at the end of 2007 was 38 MW. To address the impending power crisis in Southern Mindanao, Hedcor signed a 12-year, 400 million kwH power supply agreement (PSA) with DLPC in 2007. The PSA assures DLPC customers of clean and reliable energy starting in 2009, which will be supplied by two vital greenfield projects – the 42-MW Sibulan Hydropower Project (Sibulan) and the 34-MW Tamugan Hydropower Project (Tamugan). The construction of these plants is estimated to cost the company 11 billion over the next three years. After several years of development, the Sibulan Project began construction in June 2007 and its two cascading plants are on target to generate 212 million kwH annually starting August 2009. Tamugan is expected to break ground by June 2008 and be completed by August 2010. It is expected to generate 234 million Kwh of clean energy annually. Both Sibulan and Tamugan support the Philippine Government’s goal of increasing the country’s renewable energy-based capacity and attaining energy self-sufficiency through the development of indigenous sources such as hydro. The two projects will generate a total of 446 million kwH annually. This amount of energy will prevent the release of more than 170,000 tons of carbon dioxide equivalents (tCO2e) in the atmosphere every year. 16 • ABOITIZ POWER CORPORATION ANNUAL REPORT 2007
POWER G E N E R A T I O N Hedcor signed a 12-year, 400- million kwH power supply agreement with Davao Light in 2007. It assures Davao customers of clean and reliable energy starting in 2009, to be supplied by two greenfield projects - the 42-MW Sibulan and 34-MW Tamugan hydro plants. ABOITIZ POWER CORPORATION ANNUAL REPORT 2007 • 17
Page 1 and 2: Power Corporation Powering New Fron
Page 3 and 4: P o w e r i n g New Frontiers ABOIT
Page 5 and 6: FINANCIAL SUMMARY For the Year (In
Page 7 and 8: R E P O R T T O O U R S T O C K H O
Page 9 and 10: h Powering New Frontiers With deman
Page 11 and 12: Results of Operations POWER D I S T
Page 13 and 14: R E S U L T S O F O P E R A T I O N
Page 15 and 16: A SFELAPCO crew does live line work
Page 17: Results of Operations POWER G E N E
Page 21 and 22: STEAG State Power Inc. (SPI) contri
Page 23 and 24: We expect our distribution companie
Page 25 and 26: The strong and stable financial per
Page 27 and 28: DIRECTORS SPECIAL AND REGULAR BOARD
Page 29 and 30: Director and Senior Executive Compe
Page 31 and 32: The Office of the Chief Compliance
Page 33 and 34: Employee Relations In AP, people ar
Page 35 and 36: P o w e r i n g New Frontiers F E A
Page 37 and 38: The rest of its capacity is traded
Page 39 and 40: The annual energy requirement will
Page 41 and 42: Gone are the long queues at VECO’
Page 43 and 44: The three utilities aim to provide
Page 45 and 46: CPPC, meanwhile, is situated on a 1
Page 47 and 48: and reliable supply of electricity.
Page 49 and 50: The fulfillment of sharing the frui
Page 51 and 52: Board of Directors Jon Ramon M. Abo
Page 53: Corporate Officers Benjamin A. Cari

2007 ANNUAL REPORT Power Corporation - Aboitiz Equity Ventures

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