Philippines Solar Projects Get US$100 Million Green Financing Deal

Pentagreen Capital (Pentagreen), a sustainable infrastructure debt financing partnership established by HSBC and Temasek, and Citicore Solar Energy Corporation (CSEC), the solar development vehicle of Citicore Renewable Energy Corporation (Citicore Renewables), a Philippines-based integrated renewable energy platform, have signed a landmark financing agreement to accelerate the rollout of solar projects in the Philippines.

Pentagreen, acting as exclusive mandated lead arranger in its first project financing, structured the US$100 million mezzanine construction green loan facility and committed an initial tranche of US$30 million for a portfolio of six solar power projects with a gross capacity of 490 megawatts across the island of Luzon in the Philippines.

Pentagreen’s commitment is the first international institutional investment and is designed to enable mobilisation of additional debt funding to support the construction of the company’s ready-to-build projects.

Pentagreen’s US$30 million commitment comes with a greenshoe option to increase the committed amount to US$100 million to fund additional greenfield solar projects and the expansion of the portfolio to over 1 gigawatt.

This initial 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 of renewable electricity supply into the Luzon grid annually and result in an estimated avoided Greenhouse Gas emissions of 430,000 tonnes of CO2 annually,

Developed by CSEC, which has plans to roll out 1GW of solar capacity per year over the next five years, the projects will sell green electricity to a combination of long-term and spot market customers, supporting the Philippines’ Department of Energy’s goal of generating 35% of the country’s energy needs from renewable sources by 2030 and 50% by 2040.

“We are delighted to partner with Citicore Renewables to support its ambition of becoming a leading green electricity provider in the Philippines and are honoured to welcome them as the first addition to our own portfolio,” said Marat Zapparov, CEO of Pentagreen Capital. “As a dedicated financing vehicle for sustainable infrastructure, Pentagreen identifies opportunities where our capital and structuring capabilities can serve to unlock the barriers to infrastructure development. We believe vehicles like ours will play a crucial role in financing Asia’s progress towards net zero.”