Nextnorth looking for investors to finance 1 GW build-out

Nextnorth Holdings Corp. (NHC) [link] said that it is looking to raise up to $700 million (~P39 billion) to bring up to 1 GW of renewable energy generation capacity online “over the next three to five years”. NHC’s CEO, Miguel Mapa, said that NHC has 472 MW of capacity “under development” already between a 440 MW solar project and a 32 MW hydropower project in Isabela. Mr. Mapa said that NHC will need approximately $300 million (~P16.8 billion) to complete the 440 MW first phase of the solar project, and will need an additional $400 million (~P22.5 billion) to complete a 560 MW expansion to that same solar project.

MB BOTTOM-LINE:  NHC won its auction bid for the 440 MW solar project back in December 2022, and it looks like it started development as part of a joint venture with Total Eren S.A., a foreign engineering firm. Given that NHC wants to raise P22.5 billion to complete a 560 MW expansion, (P0.04 billion / MW), and that NHC needs P16.8 billion to complete its 440 MW first phase, I’d estimate that the joint venture has only financed about P800 million of the project so far. That’s 4.5% of the Phase 1 project, and just 2% of the combined Phase 1 and 2 development. Glass half-empty analysis would probably point out that there are plenty of solar projects with DoE certifications, and that it’s odd for a project like this that already has a deep-pocket foreign investor to suddenly need to make media noise to drum up investments. Glass half-full analysis would probably say that SP New Energy [SPNEC] is a great (and recent) case study in how Mr. Mapa could use the PSE’s listing loophole for non-operational renewable energy companies to at least raise some of that cash through an IPO on the PSE. Whether Mr. Mapa wants to stay true to the SPNEC source material by immediately changing the company’s business plan, doing a follow-on offering, changing the name, using shareholder cash to buy his own stuff, then getting the whole thing suspended within inches of delisting only to gift a massive chunk of shares to his mom’s foundation and then sell the rest to MVP–all within a year–is going to be up to him. All I know is that MVP probably felt the disturbance in the force when this article was published. SPNEC walked so NHC could run.

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