Repower Energy IPO seen to benefit from focus on hydropower projects
By Ashley Erika O. Jose, Reporter
FAVORABLE government policies and the global shift toward clean energy sources present opportunities for Repower Energy Development Corp. or REDC, analysts said, as the company started offering its shares to the public.
“REDC’s competitive advantage lies in its focus on renewable energy, specifically hydropower projects,” said Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc.
“Hydropower is a reliable and sustainable source of energy, and with the increasing global demand for clean energy, REDC’s emphasis on renewable assets positions it favorably in the market,” he said in a Viber message.
In its initial public offering (IPO), Repower Energy is selling 200 million primary common shares priced at P5 apiece, with an over-allotment option of up to 30 million shares.
Pure Energy Holdings Corp.’s subsidiary plans to list on the Philippine Stock Exchange (PSE) tentatively on July 24. Its offer period is from June 30 until noon on July 14.
Repower Energy’s final offer price suggests “investor confidence,” Mr. Arce said, adding that the company’s existing portfolio of hydropower projects can fuel investor appetite.
IPO proceeds, which are expected at about P1.15 billion, will fund the company’s hydropower projects and the development of its other renewable energy (RE) projects.
For Mr. Arce, going public shows the company’s “operational capabilities and experience in the sector,” which he said is attractive for investors seeking opportunities in the RE sector.
“REDC is a potential retail play, given its small offer size of about P1 billion and its renewable energy growth narrative,” Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said what sets the company apart from the other RE firms that went public “is that it focuses on the development of hydroelectric power plants.”
Repower Energy is planning to expand its installed energy capacity by 1 gigawatt (GW) in the next five years.
“A public listing is a key milestone for REDC, with the majority of the use of proceeds allocated for the completion of two of its ongoing projects. This will lead towards fulfilling our goal of uplifting Filipinos’ living standards through clean, accessible, and affordable energy consistent with the United Nations’ Sustainable Development Goals,” said Eric Peter Y. Roxas, president and chief executive officer of Repower Energy.
The Philippines’ energy sector is seen to have abundant potential in the renewable energy field considering the country’s vast untapped indigenous resources.
The Department of Energy also issued policies favoring the sector, including opening RE projects to full foreign ownership and issuing a policy framework for offshore wind energy projects, which is considered an emerging technology.
