Philippine Stock Exchange

As Citicore Renewable kicks off the 2024 IPO season, are we in for a greener year?

Lance Spencer Yu

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As Citicore Renewable kicks off the 2024 IPO season, are we in for a greener year?

SOLAR. Aerial shot of the Citicore Solar Cebu powerplant.

Citicore Renewable website

Could an optimistic market in 2024 bring more initial public offerings and bigger investments in green energy?

MANILA, Philippines – In 2024, the grass is looking greener: not just because of market optimism, but because another renewable energy firm will kick off this year’s initial public offering (IPO) season.

Citicore Renewable Energy Corporation (CREC), headed by construction tycoon Edgar Saavedra, is set to be the first company to go public in 2024. The solar power firm’s offer period is tentatively scheduled from March 11 to 15, with the listing date on March 22, according to the Philippine Stock Exchange (PSE).

The company could sell up to 2.90 billion primary shares, with an overallotment option of 435 million secondary shares. Although the final offer price will be set on March 6, shares could be sold for up to P3.88 each.

In December 2023, CREC said that it would use P9.15 billion of its expected P10.75 billion net proceeds for the capital expenditure of its solar farms in 2024 and 2025. The rest will go to the development of its battery energy storage systems.

“I welcome the decision of CREC to tap the equities market to raise capital since [renewable energy] projects are very much needed these days given that we are racing against time to address climate issues,” PSE president and chief executive offer Ramon Monzon said.

More IPOs in 2024?

The listing of CREC could signal renewed vigor in a sleepy PSE, which saw just three companies going public in 2023.

The local bourse initially targeted having 14 IPOs in 2023, but that never materialized after challenging market conditions and elevated interest rates spoiled investor appetite.

But things could change in 2024.

In a report, First Metro Investment Corporation (FMIC) noted that Philippine equity investors “launched 2024 with more optimism, sending the PSEi higher by 3.6% to 6,680.45 by mid-January.” With better macroeconomic conditions, softer inflation, and policy rate cuts on the horizon, FMIC said that the PSE index could hit as high as 7,500 in 2024.

Does a brighter market outlook mean more IPOs are on the way? FMIC’s research head Cristina Ulang said that it’s complicated.

“Hard to predict,” Ulang told Rappler on Friday, February 2. “IPOs are hugely dependent on market conditions. Big issuers will move only when value turnover improves, which is still low now.”

Still, the PSE is dreaming big as it expects to launch six IPOs in 2024 – double what it had in 2023 – which could collectively raise about P40 billion in capital.

Rise of renewables

There’s also another trend to look out for: the growth of renewable energy.

Just look at the sector in the PSE. Two of the three companies that went public in 2023 were focused on renewable energy – Alternergy and Repower Energy Development Corporation. Alternergy kicked off the IPO season in 2023, and now Citicore Renewable is set to do the same in 2024.

Overall, the Philippines has already become the fourth most attractive emerging market for renewable energy investment, according to BloombergNEF’s 2023 Climatescope report. Investment in clean energy rose more than 40% between 2021 and 2022, hitting $1.2946 billion.

So what does the Philippines renewable energy transition have going for it?

“The market stands out as one of the few that have implemented auctions, feed-in tariffs, net-metering schemes, tax incentives, and a strong target for renewable energy,” BloombergNEF said in its report.

Meanwhile, FMIC’s Ulang told Rappler that three factors are also among the key drivers of the green energy auction count in the Philippines:

  • Entry of foreign players
  • Partnerships given full liberalization of the industry and funding
  • Investment opportunities under the energy transition mechanism framework pioneered by Ayala Corporation Energy

The government has made strides in these areas. For instance, it has lifted ownership restrictions around clean energy, welcoming 100% foreign-owned renewable energy projects. Newly appointed Finance Secretary Ralph Recto also eyes setting up carbon taxes that could accelerate the shift to green energy.

All these efforts, a 2024 report by FMIC said, have gone towards the government’s goal of “attracting 3 gigawatts of new renewable energy investment from the private sector, a level that is more than the total clean energy installed over the past seven years.”

And if you ask Filipinos, the overwhelming majority – 85% – agree that it is “truly important” to increase the use of renewable energy sources, a sentiment that cuts across social classes.

“This is a sentiment in terms of favoring renewable energy sources, a sentiment that is shared by many Filipinos,” Pulse Asia president Ronald Holmes said last November 13, 2023.

The government put up the framework, and the people support the cause. Now, the ball is in the court of big businesses to go green. –

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Lance Spencer Yu

Lance Spencer Yu is a multimedia reporter who covers the transportation, tourism, infrastructure, finance, agriculture, and corporate sectors, as well as macroeconomic issues.