Construction, property and renewable energy (RE) development tycoon Edgar Saavedra, who chairs engineering and infrastructure conglomerate Megawide Construction, and Citicore Renewable Energy Corp. (CREC), gave sage advice to members of the prestigious Rotary Club of Manila whom he addressed as the Club’s guest speaker during its meeting at the Dusit Thani in Makati Thursday last week.
“Now that I am in my 50s, I realize that doing business, it’s not all about money. If you can help people and communities, the country and at the same time make money, why not? Why hit only one bird if you can hit four with one stone?,” said Saavedra, an engineer who co-founded construction firm Megawide with fellow La Sallian Michael Cosiquien in 1997.
The company obtained its Triple A License from the Philippine Contractors Accreditation Board in 2007, bagging two major contracts that year, SM Development Corporation’s Berkeley Residences and Grass Residences Tower 1.
Pre-cast facilities
“In (February) 2011, Megawide went public as we expanded by building precast facilities so we could build faster,” Saavedra said.
The Megawide investment public offering (IPO) raised P2.3 billion, funding the company’s state-of-the-art precast manufacturing complex in Taytay, Rizal. This enabled Megawide’s diversification of its client base, as it entered into a private-public partnership (PPP) contract with the government, to address the housing backlog in the country.
Megawide also undertook the building of classrooms around the country. “We completed 10,000 classrooms on a 10-year build-operate-lease-transfer contract with the Department of Education (DepEd). This year will be the last year of the 10-year contract for 10,000 classrooms across four regions. Though this is more simple and not as prestigious as airports, this (building classrooms) for me, is more meaningful than any of my projects,” says Saavedra, contractor (along with Megawide’s India-based consortium partner, GMR Infrastructure) for the revamped Mactan-Cebu International Airport and the new Clark International Airport passenger terminal building.
“When we accepted the classroom project, I remember then DepEd secretary, a La Salle brother, Armin Luistro reminding me to remember the three values of a La Sallian — the spirt of faith, zeal for service, communion in mission, or in Latin, religio, mores and cultura. The budget of the government for the project was small, and I asked why is it so low? No one else wanted to bid for it. So he sent me a message, try to find a way, if you need to redesign it, do it. And he reminded me, ‘remember the values of a La Sallian.’”
No longer merely preoccupied with profit, Saavedra has realized that “one cannot have too much money.”
First-world Philippines
What he endeavors for now is the concretization of his vision of a first-world Philippines, particularly as he drives his other major business involving renewable energy.
Established in 2015, Saavedra’s Citicore Renewable Energy Corporation (CREC) is envisioned to power a First World Philippines with pure renewable energy sources such as solar, wind and hydro projects.
As the Philippines strives to transition to clean power, aiming to hit at least 35 percent in terms of renewable sources of energy by 2030 and 50 percent by 2040, Saavedra’s CREC endeavors for a major share in that capacity for a consequential share.
A year short of a decade since he established CREC, the company today, with a total 285 MW in solar capacity, is the Philippines’ second biggest solar power generator.
CREC’s goal is to become one of the top three, if not the largest power generation companies, not only in solar, in the country.
It is well on its way to reaching that goal. In late May this year, CREC completed its IPO of 1.7 billion common shares plus 178 million overallotment shares at P2.70 per share, raising a total of P5.3 billion which included some P732 million ($12.5 million) from the United Kingdom’s Mobilising Institutional Capital for Listed Product Structures (MOBILIST).
MOBILIST
Partnering with the Philippine Stock Exchange (PSE) since July 2023, MOBILIST is an investment vehicle under the UK government’s British Investment Partnerships program which looks for renewable energy (RE) companies in which to invest.
Remarking on MOBILIST’s investment in CREC, PSE president and CEO Ramon Monzon said “CREC was an ideal choice for MOBILIST’s maiden investment in the country, considering its criteria for selecting sustainable finance products to invest in. Its choice is shared by other institutional and retail investors as evidenced by CREC’s full exercise of its overallotment option. After all, as a pure-play renewable platform, CREC boasts a gross installed capacity of 285.1 MW as of end-2023.”
The P5.3 billion raised by CREC from its IPO, along with another P5 billion generated from an earlier sale of Citicore Renewable Energy REIT Corporation (CREIT) shares to SM Investment Corporation puts CREC in a position to realize its vision of powering up a first-world Philippines with pure renewable energy.
Following CREC’s debut PSE listing on 7 June 2024, Saavedra’s third company to list on the bourse after his Megawide Construction Corporation in February 2011 and CREIT in February 2022, the company entered into a venture with Ramon Ang’s San Miguel Global Light and Power Corp. to jointly develop and operate a 153.5-MW solar energy project in Mariveles, Bataan.
Targeted for completion by 2025, the project will add 76.76 MW to CREC’s solar energy capacity which the company aims to grow to 5,000 MW by 2028.
Solar power plants
Currently, Saavedra’s CREC, with P3.68-billion revenue in 2023, has a combined gross installed capacity of 285 MW from 10 solar power plants and micro-grid solar rooftop systems in Bulacan, Bataan, Tarlac, Clark, South Cotabato, Cebu, Silay in Negros Occidental and the Arayat-Mexico Solar Farm in Pampanga, a joint venture with Ayala Corporation’s ACEN.
Ramping up its renewable energy development, the company was awarded by the Department of Energy’s Green Energy Auction Program 2, the largest solar capacity of 430 MWac ground-mounted solar and 362 MWac of onshore wind, for a total of 792 MW.
It also develops run-of-river (ROR) hydro in Ilaguen, Isabela, having secured wind energy service contracts for at least seven off-shore wind projects.
Notes Saavedra, “Power in the Philippines is the second most expensive in Southeast Asia, next to Singapore. Unlike Malaysia and Indonesia, I’m not sure about ‘Vietnam, these countries are heavily government-subsidized. Here, we have zero-subsidy; that’s the beauty of the Philippines, But of course, we have to pay for the expensive price of power.”
Power prices are expensive, yes, “but there is really a shortage of power, and demand must be met,” he said, pointing to CREC’s target of five gigawatts (GW) peak capacity within five years.
Battery
Solar and wind energy aside, what Saavedra intends to get into is BESS, that is, Battery Energy Storage System. “We expect our solar energy projects to be coupled with batteries on the side in which you store all the energy you derive from sunlight. You see, there’s a downside to solar; it peaks at noontime, then wanes afterward. But you can partner solar with battery storage, you can store the energy source and then dispatch it at the time that you want. You have more predictability and this is one good way to solve our power crisis. This is the direction of CREC.”