MANILA, Philippines — Citicore Energy REIT Corp. (CREIT) has finalized the acquisition of a property in South Cotabato for P753.8 million.
In a disclosure to the Philippine Stock Exchange, CREIT said it entered into a Deed of Absolute Sale (DOAS) with Citicore Solar South Cotabato Inc. for the purchase of a 79,997-square meter land in the municipality of Surallah in South Cotabato.
The property is the site of Citicore South Cotabato’s 6.23-megawatt peak (MWp) solar power plant, which was successfully commissioned on Dec. 9, 2015.
“Immediately after the execution of the DOAS, CREIT and Citicore South Cotabato executed a lease agreement for a term of 25 years,” CREIT said.
Citicore South Cotabato is wholly owned by Sikat Solar Holdco Inc. (SSHI), wholly owned by Citicore Renewable Energy Corp. (CREC), which owns 47.63 percent of CREIT.
Last March, CREIT signed a DOAS for a 253,880-square meter land in Barangay Pasong Bangkal, San Ildefonso, Bulacan from Citicore Solar Bulacan Inc. for P1.75 billion.
The Bulacan property is the site of Citicore Bulacan’s 15-MWp solar power plant, which was successfully commissioned on March 12, 2016.
Citicore Bulacan is wholly owned by Citicore Solar Holdings Inc. (CSHI), a wholly owned subsidiary of CREC.
“Together with the acquisition of…the Bulacan property, the acquisition of the South Cotabato property will allow CREIT to generate leasing income over a long-term period of 25 years, adding 20 percent to its total leased area,” CREIT said.
“The two properties will contribute 21 percent to CREIT’s total lease revenue and bring total operating capacity of all its tenants to 145-MWdc from CREIT’s pre-initial public offering capacity of 124MWdc,” the company said.
CREIT expects a change in its financials starting this year, delivering a recurring income stream as it shifts its revenue source from electricity sales to land rental income.
The company reported a net income of P226 million, more than double the P104.1 million booked in 2020.
CREIT said the energy sector remained resilient and showed a strong performance amid the pandemic, brought about by the sustained high demand for electricity because of remote work arrangements and work-from-home set-up.
Audited gross revenues amounted to P352 million, up 31 percent from P269.1 million due to higher electricity sales resulting from the feed-in tariff (FIT) rate adjustment and land rental income.
CREIT said this power revenue stream would no longer apply to its financials this year as the company’s service contract for Clark solar plant, as approved by the Department of Energy, was transferred to Citicore Renewable Energy Corp. (CREC), its sponsor, effective Dec. 25, 2021.