Citicore Renewable Energy Corp. (CREC) is poised for significant expansion in the Philippine renewable energy sector, marked by strategic partnerships and a substantial capital expenditure. The company has teamed up with China’s Sungrow Power Supply Co., Ltd. to integrate 1.5 gigawatt-hours of battery energy storage systems (BESS) across its solar plants.

Sungrow will provide both the technology and expertise in engineering and construction design for these BESS deployments, a move aimed at enhancing the efficiency of CREC’s renewable energy facilities and supporting the Department of Energy’s energy transition initiatives by supplying mid-merit power.
In line with its ambitious five-gigawatt (GW) project roadmap, CREC anticipates a higher capital expenditure budget for 2025, earmarking more than P56 billion primarily for renewable energy projects. The company is actively working to bring its first GW of energy projects online this year, largely driven by projects secured during the government’s second green energy auction in 2023.

CREC aims to energize 200 megawatts (MW) by April and an additional 800 MW by August, projecting a total capacity of nearly 1.2 GW by the end of the year. This aggressive timeline contributes to its overarching goal of achieving 5 GW of capacity by 2028.

Furthermore, CREC is set to implement a P6.7-billion investment deal with Indonesian state-owned PT Pertamina Power Indonesia (Pertamina NRE) by the first quarter of 2025. The proceeds from this partnership will further bolster the development of CREC’s nationwide pipeline of renewable energy projects, advancing its energy objectives. Currently, CREC operates solar facilities across the Philippines with a combined gross installed capacity of 285 MW.

CREIT has a variable lease component in the rental income it receives from the solar power plant tenants which is reflected in Q4 dividend bumps as seen below:

This means there will be a substantial Q4 dividend later this year from CREIT’s share of electricity sales from the 1GW coming online in 2025. Integrating BESS  into the solar plants would also contribute to higher electricity sales and would further increase CREIT’s variable income. CREC is only getting started with its 5GW goal so the growth runway is very long indeed although I don’t expect all of its projects will be infused into CREIT such as the joint ventures nor the hydro and wind projects.

In the above interview, CEO Oliver Tan mentioned that CREIT is also looking at acquiring not just land but the solar power facilities themselves and leasing them to the power plant operator-tenants. They have done this previously with Clark Solar Power Plant which sits on land owned by Clark Development Corporation, a government entity. This would be akin to a healthcare REIT owning the hospital equipment or a data center REIT owning the servers and leasing them out. I look forward to CREIT’s upcoming acquisitions and its positive impact on quarterly dividends.