Citicore secures P9-B project financing with RCBC
At A Glance
- While traditional financing models somehow deterred early RE ventures in the past, more and more banks are already navigating successfully the complex structure of portfolio lending as well as tailor-fitting their solutions to green energy projects – and RCBC has also been leading in that transformative project financing pathway. <br>
Flourishing solar power developer giant Citicore Renewable Energy Corporation (CREC) has secured P9.0 billion worth of loans from Yuchengco-led Rizal Commercial Banking Corp (RCBC) with an option to increase it to P20 billion; and that will be funneled mainly for the commercial development of its pipelined solar installations as well as other power plant projects.
In a statement to the media, Citicore indicated that the project financing will bankroll between 600 megawatts (dc) to 1,000 megawtts (or 1.0 gigawatt) of renewable energy ventures.
“The financing deal, arranged by RCBC Capital Corporation, is slated to reach up to P20 billion in funding, starting with the signing of an initial tranche of P9 billion,” Citicore has specified in its statement to the media.
Citicore qualified that the project funding structure inked with RCBC is unique because it is “the first-of-its-kind project financing in the Philippines which covers various project portfolios instead of the typical per-project financing structure.”
Citicore's signing of the P9.0 billion loan agreement with RCBC
The company is already accelerating into its buildout track for the second phase of its 1,000MW yearly solar projects – as anchored on its 5.0-gigawatt solar farm development blueprint to be concretized within five-year timeframe. Upon hitting that goal, Citicore could emerge as the biggest solar developer in the country.
Oliver Tan, president and CEO of Citicore, emphasized that “RCBC’s support will assist us to fulfill our 1GW target for this year.”
The RE firm added “the proceeds of the initial funding tranche will be applied towards CREC’s development of certain solar power plant projects in Batangas, Pampanga, and Negros Occidental.”
Onward, the company conveyed that “the proceeds of subsequent tranches will be applied towards the completion of additional solar power projects in or additional generating capacity from CREC’s pipeline of projects in various stages of development.”
Citicore had successfully cornered 20-year power supply agreements (PSAs) for close to 1,000MW of solar and wind farm projects through the green energy auction (GEA) program administered by the Department of Energy (DOE) last year – and the capacities of these projects are up for deliveries between 2024 to 2026.
The GEA-awarded PSAs, in particular, will guarantee the revenue stream of the winning project sponsors within the span of two decades, and that will provide comfort level to lenders on their capacity to honor financial obligations.
The ramp up of clean energy installations in the Philippines is seen as a major catalyst to the envisioned energy transition that will shatter the long-term dominance of coal as the ‘technology king’ in the country’s energy mix across decades.
And while traditional financing models somehow deterred early RE ventures in the past, more and more banks are already navigating successfully the complex structure of portfolio lending as well as tailor-fitting their solutions to green energy projects – and RCBC has also been leading in that transformative project financing pathway.