Citicore to invest P70 billion in 1,500 MW solar projects

MANILA, Philippines — Citicore Renewable Energy Corp. (CREC) plans to invest around P70 billion in its 1,500-megawatt (MW) pipeline in the next five years, which can be infused in newly listed Citicore Energy REIT Corp. (CREIT).

“In 2019, we started planning to build new projects when we launched the 1.5-gigawatt (GW) roadmap. Then COVID came. So, we are upbeat from this year onwards with regard to launching these projects…we’re estimating P70 billion in the next five years,” CREC president and CEO Oliver Tan said in a media briefing following CREIT’s debut on the Philippine Stock Exchange yesterday.

Tan said the P70-billion investment could partly be funded by the CREIT initial public offering (IPO) proceeds amounting to P6.4 billion.

“We can also borrow from local banks to bankroll construction, which later on will be folded into CREIT, and maybe a combination of preferred shares offering,” Tan said.

CREC is working on a total of 630 MW of RE projects that are in various development stages and are targeted to come online in two to three years.

For this year, CREC is allotting P3 billion for capital expenditures to secure land for solar projects.

“This would be for the Arayat-Mexico Phase 2. We are expanding the Silay plant, also the Bataan plant, and three projects in Batangas,” Tan said.

CREC has also secured land rights and service contracts from the Department of Energy for three solar projects, which have begun preliminary engineering activities.

It completed access road construction for its 19.7-MW run-of-river hydropower project in Isabela, which is aimed to be completed within three years.

The company is also looking at acquiring existing solar power projects and other RE technologies to bump up RE capacity.

“The solar power industry is very fragmented. You will see 10 MW, 20 MW across the Philippines. We see an opportunity to consolidate all these operating assets,” Tan said.

“Notwithstanding, we are open to look into other technologies. We’re going to be primarily solar, but we’re also exploring other RE technologies,” he said.

The company is also upbeat on the RE industry beyond its five-year plan amid the push to replace fossil fuel power sources with renewables.

“The mandate of DOE is to increase RE share to 50 percent. This translates to around 12,000 to 14,000 MW or around P1.5 trillion in investments. The challenge is how fast we can convert all the fossil fuel to renewables. It can go beyond 15 years. That’s the opportunity and the size of the market,” CREC chairman Edgar Saavedra said.

On its market debut, CREIT closed at P2.84 apiece, up 11.37 percent from its offer price of P2.55 per share.

The company pushed back its listing day from Feb. 17 due to strong demand. It completed its offer period on Feb. 8, with oversubscriptions across all tranches – institutional, trading participants, and local small investors.

As the first renewable energy themed real estate investment trust (REIT), PSE president and CEO Ramon Monzon said more than 19,400 investors have waited for the company’s shares to be listed and traded in the exchange.

“I am sure those investors are keeping their fingers crossed that CREIT will be worth the wait.

The high level of interest among investors for both REITs and renewable energy companies obviously contributed to the brisk demand in the shares of CREIT. The oversubscription with the local investors in this IPO tells us that they are optimistic about the company’s prospects,” he said.