Filipino-led Citicore Renewable Energy Corporation (CREC) will fork out P35 billion worth of capital expenditures (capex) for this year, primarily to advance the completion and commercial operations of the first batch of its gigawatt-scale solar installations.

In an interview with the media, CREC President and CEO Oliver Y. Tan indicated that the capital outlay will be “majority for our ongoing projects,” with him specifying that the aggregate funding had been drawn from mixed sources, including fund raising activity.

He noted that the first 1,000 megawatts of solar projects in CREC’s aggregate pipeline of 5,000MW (5.0 gigawatt) had already been “fully funded…so we will just do the actual installations and actual development.”

Tan qualified the company is now moving forward on its fund-raising activity for the second batch of 1,000MW of CREC’s solar ventures – and part of project financing to be funneled into that next flow of investments will be proceeds from its forthcoming initial public offering (IPO) at the Philippine Stock Exchange.

Essentially, the initial gigawatt-scale capacities that could eventually cement CREC’s stature as the biggest solar energy developer in the country are strategically spread in various Luzon and Visayas sites – and these ongoing solar developments include four projects in Batangas; two in Quezon; two in Pangasinan and one each in Negros and Pampanga.

Tan specified the solar facilities that are now advancing into completion phases would cover the capacities that the company had won in the green energy auction (GEA) administered by the Department of Energy (DOE) in July last year.

CREC was hailed as the big winner in the last RE auction of the government – and the capacities it successfully cornered in the GEA had been underwritten with 20-year power supply agreements (PSAs), that in turn will guarantee the company’s revenue stream for the projects within a span of two decades.

“We will reach completion and capacity delivery before end of the year – so that is within our commitment with the DOE, based on the terms of the GEA,” Tan conveyed.

From this year’s magnitude of capex, he opined that capital spend for onward project-developments may track decline in the years ahead – and that could be precipitated by possible downtrend in the costs of solar panels as well as the economies of scale that CREC can generate if they will be pursuing expansion projects in sites that they already utilized for the initial wave of constructions.

“For the next batch, we’re already consolidating the land – we’re almost halfway into completing that. Our pipeline projects are cluster areas, so we’re not like strike anywhere, it’s going to be multiple phases in one region,” Tan asserted.

He expounded that congregating the projects at adjacent or contiguous sites will bear a lot of advantages – not just on economies of scale, but even on project permitting concerns as well as on building relationships with host-local government units (LGUs) and communities.

On grid integration of CREC’s solar projects, Tan similarly emphasized that they have been employing ‘creative solutions’ as well as engineering expertise to ensure that their solar facilities will have viable grid integration as well as optimized operating efficiencies.

“Grid is always a challenge, so you need to be creative – you have to accompany that with engineering solutions,” he said, while emphasizing that “our strategy is: we’d like to map out areas where there are pockets of available capacity or where NGCP (National Grid Corporation of the Philippines) has its expansion, so each prospect site would have to be studied carefully where it should be most feasible to install,” Tan stressed.