Citicore Renewable Energy readies ‘blockbuster’ IPO

Tycoon Edgar Saavedra’s Citicore Renewable Energy Corp. has tapped the country’s biggest investment bank, BDO Capital & Investment Corp., to lead a “blockbuster” initial public offering (IPO) that could be launched as early as the second quarter of the year.

Company CEO Oliver Tan told reporters on Friday they were also in talks to form a consortium of local and international banks to arrange the IPO.

Proceeds would partially finance a $3.75-billion expansion pipeline that would massively scale up their solar power capacity from over 240 megawatts (MW) to 5,000 MW by 2027.

He said their long-term plan also involved investments in hydro power, battery storage and offshore wind projects.

“Because of the size, there will be an international component [to the IPO]. It’s going to be a syndicate of local and international banks,” Tan said.

“It’s going to be a blockbuster [size],” he added, while declining to share additional details.

Saavedra said in an interview last month the IPO could fetch a valuation of close to $1 billion.

Tan said foreign capital was critical as the Philippines transitions to clean power sources. This was in line with the government’s goal to raise renewable power output to 50 percent of the country’s requirements by 2040 from under 30 percent at present.

“At the end of the day [it requires] enormous capital requirements to fund this. Local players cannot do it alone,” he said

Citicore Renewable Energy is the sponsor of real estate investment trust firm Citicore Energy REIT Corp. and an affiliate of listed construction and engineering firm, Megawide Construction Corp.

Tan said their expansion will initially focus on solar energy, which is faster to build since projects can be completed within 10 months.

By next year, Citicore Renewable Energy will have almost 1,250 MW of installed capacity, providing revenues of about P7 billion to P8 billion, he said.

The company is also developing a 19.7-MW hydro power project in Ilagan River, Isabela. This will be completed by 2026.

It also secured seven service contracts from the Department of Energy to develop offshore wind plans with a total capacity of 3,000 MW.

Tan said the company will likely tap foreign partners for those projects, which could take seven to eight years to build.

Citicore Renewable Energy is moving to secure financing from investors amid increasing urgency for power independence in the wake of the Russian invasion of Ukraine.

“Currently, we have around 10 gigawatts (GW) of baseload coal that needs to be replaced with renewable energy,” Tan said.

Since solar power is intermittent, he said the industry will need to produce 50 GW of this renewable energy to be able to replace 10 GW of baseload capacity. Baseload is the readily available capacity at any given time.

Citicore Renewable Energy joins other firms seeking to hold public listings in 2023. These include the P28-billion listing of billionaire Enrique Razon Jr.’s Prime Infrastructure Capital Inc., Upson International Corp. (P5.4 billion) and Alternergy Holdings Corp. (P1.87 billion). INQ