Innovation has become the hallmark of the way Citicore Renewable Energy Corp. is changing the business landscape insofar as the country’s march towards green energy projects is concerned. After experimenting with what it calls as “Agrovoltaic” technology, where pechay crops are planted under solar panels, the firm has accessed a green loan facility that allows it to scale its planned one gigawatt capacity build-up every year for the next five years.
That green loan facility, which commands lower interest rates than commercial ones, came from Pentagreen Capital, a sustainable infra debt financing partnership between HSBC and Singapore sovereign wealth fund, Temasek Holdings. With an initial funding of $30 million, the landmark green loan will ultimately translate to $100 million that would let Citicore RE achieve its planned rollout of five gigawatts.
One gigawatt of RE will energize 876,000 households a year and will result in less power outages in some parts of the country. The country, as part of a global initiative to reduce CO2 emissions, is aiming to have 35 percent of its energy needs powered by renewable energy sources by 2030 and then 50 percent 10 years later. That means Citicore is well-positioned for its accelerated RE output that it can either sell through the grid or via the spot market.
This initial $30 million tranche will provide funding for the construction of four greenfield projects and two more that have been recently completed. These projects are expected to add around 691 gigawatt hours (GWHs) of renewable electricity supply into the Luzon grid annually. The RE supply will mean a reduction in greenhouse gas emissions equivalent to 430,000 tons of carbon dioxide.
“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 5 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,” according to Citicore President and CEO Oliver Tan.
The funding facility is the first international institutional investment and is designed to enable mobilization of additional debt funding to support the construction of Citicore Renewables’ ready-to-build projects. For Pentagreen CEO Marat Zapparov, the green fund’s partnership means supporting Citicore Renewables’ “ambition of becoming a leading green electricity provider in the Philippines.”
Last March, Citicore Renewables harvested pechay crops planted underneath its solar panels in Dalayap, Tarlac City that sends the message that agriculture can also thrive under solar panels. Before the innovative take on that plot of land, the prevailing impression was that solar power generation will displace agriculture. The company has also partnered with the local farmers for the planting of other crops like arugula and turmeric.
Aside from its solar panels in Tarlac City, the company also has solar energy plants in Negros Occidental and in Cebu and is looking at other sites that would see this same messaging thrust that solar plants and agribusiness can live together. It is this innovative take that shows how the company is looking at its business model from a different perspective.
There is also a CSR undertaking beneath that marriage of solar generation and farming since the company tries to partner with farmer families in producing the pechay and other harvests. Thus, the farmers are not displaced totally when the farm plots they till are converted to shining solar energy plants.
Perhaps, it is this novel approach that allowed Citicore Renewables to get that initial funding support from Pentagreen Capital, a first for the country actually, and this could blossom into more funding partnerships that could help propel the economy to greater heights. After all, the economy’s growth is a function of the energy capacity it can harness for business establishments and manufacturing facilities.
Pretty soon, with the entry of more RE projects in the energy pipeline, the government can later on address the high energy rates in the country that has hamstrung our march towards that elusive goal of becoming a lower-middle income country. That would mean a lot for the poor folks, some of whom get by on just P50 for food daily.