initial public offerings

Citicore Renewable Energy plans P13-billion IPO. Here’s their pitch.

Ralf Rivas

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Citicore Renewable Energy plans P13-billion IPO. Here’s their pitch.
Edgar Saavedra is taking his solar power company public to jolt the currently ho-hum Philippine stock market in 2024

MANILA, Philippines – Tycoon Edgar Saavedra is set to take his solar power company public in 2024 to accelerate its expansion.

Citicore Renewable Energy Corporation (CREC) is planning a P12.9-billion initial public offering in March, aiming to sell 2.9 billion shares up to P3.88 each.

The company aims to list at the Philippine Stock Exchange on March 15, 2024.

Of the net proceeds of P10.76 billion, most or P9.15 billion is allotted for capital expenditures of CREC’s solar farms in 2024 and 2025. The remaining P1.6 billion will be for the development of its battery energy storage systems.

UBS AG is the sole global coordinator and joint bookrunner, while BDO Capital was named joint bookrunner and domestic lead manager.

Competitive strengths

In its preliminary prospectus, CREC listed the following strengths:

Portfolio. CREC, founded in 2015, said it has the second largest solar portfolio, accounting for 19% of the total solar installed capacity in the country. 

“In only one year after we began operations, we completed three greenfield solar projects, which contributed a total installed capacity of 103 megawatts of renewable energy to the Philippine energy mix. Since then, we have scaled up our operations, and as of September 30, 2023, developed, operated, and maintained 10 operating solar assets with a combined installed capacity of 285.1 megawatts,” CREC said.

It has a gross installed capacity pipeline of 6,446 megawatts in solar power generation and 812 megawatts in onshore wind power generation in various stages of development. 

CREC is the renewable energy company of Citicore Power Inc. and is also one of the sponsors of Citicore Energy REIT, the Philippines’ first real estate investment trust for renewable energy real estate properties.

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CREC added it takes a “clustered approach” in taking on solar projects, which include both greenfield and brownfield projects or land that has yet to be developed or those that have already been built on.

Profits. As of end-2022, CREC had total revenues of P2.79 billion, while comprehensive net income stood at P841 million. For the first nine months of 2023, CREC’s comprehensive net income stood at P811 million.

Need for energy. CREC’s prospectus said the company is well-positioned to capitalize on the Philippines’ long-term growth opportunities in the renewable energy space, as the country shifts from conventional energy to renewables.

CREC cited that as the Philippine economy grows, peak electricity demand for the past five years has reached an annual average growth rate of 3.5% nationally, and over the past two decades. The Philippines’ peak demand has also doubled from 8.3 gigawatts in 2003 to 16.6 gigawatts in 2022

The company also cited the Department of Energy’s projections, where peak energy demand in the Philippines is expected to almost quadruple from 2020 to 2040 – from 15,282 megawatts in 2020 to 54,655 megawatts in 2040. 

“In order to meet increasing demand, growth in installed capacity is essential and has prompted the Philippine government to encourage the expansion in capacity. The 2020-2040 National Renewable Energy Program has set a target of reaching at least a 35% share of renewable energy in the Philippines’ power generation mix by 2030 and aims to increase it to at least 50% by 2040,” CREC said.

Affiliate’s edge. CREC said it benefits from the experience of Megawide for its construction and engineering needs. 

It said it is able to complete the construction of a solar project between eight months to a year, from the award of the engineering, construction, and procurement contract of its selected contractor. –Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.