Philippines sees surge in renewable development with record-breaking IPOs


CREC's solar farm in Bataan, Philippines. (Photo: CREC)

The renewable energy sector in the Philippines is experiencing a significant boom. Among the five companies listed on the local stock exchange over the past 14 months, three are renewable energy firms. One notable upcoming listing is Citicore Renewable Energy Corporation (CREC), scheduled for June 7. CREC is expected to raise 5.3 billion pesos (about 90.4 million USD), potentially marking the largest renewable energy IPO in the Philippines since 2006.

CREC, a subsidiary of Megawide Construction Corporation, specializes in wind, solar, and hydropower energy. The company plans to invest 175 billion pesos (about 2.98 billion USD) over the next five years to develop solar power, aiming for a total capacity of 5 GW.

Two other renewable energy companies also had successful IPOs last year. In March 2023, Alternergy Holdings Corporation (AHC) raised 1.47 billion pesos (about 25 million USD), and in July, Repower Energy Development Corporation (REDC) raised 1.15 billion pesos (about 19.6 million USD). Both companies performed remarkably well despite the risks posed by inflation and economic slowdown.

To reduce reliance on fossil fuels, the Philippine government is actively promoting renewable energy development. The goal is to increase the share of renewable energy in the country's power generation from 22% to 50% by the end of 2040. This initiative has spurred companies to expand their operations and seek external funding, resulting in a wave of IPOs. Following this trend, NexGen Energy, another renewable energy company, is also preparing to list on the Philippine Stock Exchange in July 2024.

Bangui Wind Farm is located in Ilocos Norte, Philippines. (Photo: iStock)

According to Bloomberg New Energy Finance's (BNEF) 2023 Climatescope climate survey, the Philippines ranks fourth among emerging markets in terms of attractiveness for renewable energy investment. The country saw its clean energy investment grow by over 40% between 2021 and 2022, reaching 1.29 billion USD.

The report highlights that the Philippines stands out by utilizing a diverse range of mechanisms, including auctions, feed-in tariffs, net-metering schemes, and tax incentives, along with setting ambitious renewable energy targets. These factors contribute to the country's strong investment appeal in the renewable energy sector.

First Metro Investment Corporation (FMIC) analyzed that the primary drivers of the local green energy market include the government's openness to foreign investment, the provision of a free development environment for industries and capital, and the Ayala Group's energy transition framework. FMIC estimates that private sector investments could add an additional 3 GW to the Philippines' renewable energy capacity, surpassing the total installed capacity of clean energy over the past seven years.

Source: BloombergRapplerPhilstar

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