Citicore eyes energy REIT listing

Citicore Power Inc., a sister company of listed Megawide Construction Corp., is considering an energy REIT (real estate investment trust) initial public offering this year, in what could be the first energy REIT offering in the country. 

The company is considering the REIT listing as part of its bold plan to add 1,500 megawatts in its solar power capacity, on top of its existing total capacity of 168 megawatts from eight power plants all over the country.

“We will build 1,500 megawatts of new solar capacity in the next five years,” Citicore Power president and CEO Oliver Tan said in an interview yesterday. 

The company is already in talks with a Japanese investment bank which may handle the deal, which could potentially raise up to P10 billion in proceeds.

Tan said a REIT listing would enable the company to maximize the value of the real estate assets of its solar plants. 

The real estate assets–some of which are company-owned and others on a long-term lease–have strong financial viability as the solar plants have guaranteed income because of existing contracts with off-takers. 

At present, off-takers are the government and private sector which includes corporate giants. 

At present, Citicore Power, the biggest operating local solar company in the country, has a well balanced portfolio of renewable energy businesses. 

These include eight operating solar power plants plus two more under construction, three biomass plantations, one run-of-river hydropower plant and one water distribution concession. 

Its solar power plants are the 6.2 MW plant in Cotabato, the 7.5 MW plant in Tarlac, the 8.8 MW plant, also in Tarlac, the 18 MW plant in Bataan,  the 22.3 MW plant in Clark, the 25 MW plant in Negros Occidental and the 60 MW plant in Cebu.

A REIT, as defined by the Securities and Exchange Commission (SEC), is a stock corporation established principally for the purpose of owning income-generating real estate assets. It provides returns for investors derived from rental income of the underlying real estate asset.

Companies that own and operate income-generating real estate assets are considered REIT companies. 

These companies include offices, apartment buildings, hotels, warehouses, shopping centers, highways, etc. 

Tan said that Citicore’s REIT listing would result in the diversification of REIT players in the country.

At present, REIT companies that have listed are property companies, Ayala Land’s AREIT Inc. and Double Dragon’s DDMP REIT.