Citicore confirms Q1/25 ground-breaking for JV solar project with SMC

Citicore Renewable Energy [CREC 3.55 ?0.6%; 11% avgVol] [link] confirmed that it plans to break ground in Q1/25 on the 153.3 MW solar project in Bataan that it is pursuing with joint venture partner San Miguel Global Light and Power (SMGLP), a subsidiary of San Miguel [SMC 82.00 ?1.4%; 102% avgVol], subject to timely completion of the “engineering design and pre-development plans”. CREC said that it expects the project to take 12 months to construct, but “terrain and ground conditions” could cause construction to take 15 months. This is the first JV between CREC and SMC.

MB BOTTOM-LINE:  These are really tidy little projects that are financed on a 70/30 basis, with 70% of the cost paid for through debt (project financing), and 30% of the cost paid for through equity (money/property), split between the JV partners according to their respective interests. Upon completion, after only one year, all the electricity gets sold to the San Miguel Group. You can tell CREC is excited by the chance to run this play over and over again by the quote from CREC’s CEO, Oliver Tan, where he said, “We hope that if successful, both parties are happy, we hope that it will continue to the next and to the next.” SMC is one of the largest power consumers in the Philippines, with operations across several industries all over the country. This could be a lucrative tie-up for CREC if they’re able to deliver, but we may have to wait a while to get a better sense of how these projects will hit CREC’s financial statements.
 

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