Philippines-based Citicore Renewable Energy Corp. (CREC), the solar development vehicle of Citicore Renewable Energy Corporation, has signed a $100-million financing deal for faster roll out of solar projects in the Philippines with Singapore based Pentagreen Capital, a sustainable infrastructure debt financing partnership established by shareholders HSBC and Temasek.
CREC said the landmark funding facility is organised by Pentagreen is a mezzanine construction green loan facility with an initial tranche commitment of $30 million for a portfolio of six solar power projects with capacity of 490 megawatts across Luzon in the Philippines.
The solar projects includes the 36 MW Arayat 1 and 22 MW Arayat 2 in Pampanga which are already operational and the 125-MW Lumbangan and the 72-MW Luntal projects in Batangas which are under construction. It also includes the Bolbok 1 and Bolbok 2 projects with a capacity of 72 MW and 100 MW, respectively which are expected to begin construction in the fourth quarter. The financing will enable Citicore Solar to allocate capital efficiently to accelerate the development of its project pipeline in line with the planned roll out of 1 gigawatt of renewable energy capacity per year in the next five years, said the firm.
“Pentagreen’s partnership with Citicore Renewables is a vote of confidence in our ability to scale up, enabling us to achieve our planned 1GW project roll out this year, in line with our 5GW in five years roadmap. We appreciate Pentagreen’s support for our solar projects as it unlocks the development of our renewable energy capacity pipeline in an accelerated manner,” said CREC president Oliver Tan.
“The initial tranche will provide funding for the construction of four greenfield projects and two more that were recently completed. These projects are expected to add around 691 gigawatt-hours of renewable electricity supply to the Luzon grid annually and result in avoided greenhouse gas emissions of 430,000 tons of carbon dioxide annually, in line with the methodology established by the International Financial Institutions Technical Working Group on Greenhouse Gas Accounting,” he said.
The projects will sell green electricity to a combination of long-term and spot market customers, supporting the Department of Energy’s goal of generating 35 percent of the country’s energy needs from renewable sources by 2030 and 50 percent by 2040.
CREC was recently awarded 916.58 MW solar capacity installation under the DOE’s Green Energy Auction Program 2.
“Pentagreen’s commitment is the first international institutional investment and is designed to enable mobilization of additional debt funding to support the construction of CREC ready-to-build projects. It comes with a greenshoe option to increase the committed amount to $100 million to fund additional greenfield solar projects and the expansion of the portfolio to over 1 GW. We are delighted to partner with Citicore Renewables to support its ambition of becoming a leading green electricity provider in the Philippines and are honored to welcome them as the first addition to our own portfolio,” said Pentagreen Capital Chief Executive Marat Zapparov.
The facility was structured as a green loan under CREC’s Green Financing Framework, which was developed according to ICMA Green Bond Principles 2021, ASEAN Green Bond Standards and LMA Green Loan Principles and which has received a second party opinion from Sustainalytic, as per the firm.