RENEWABLE energy firm Citicore Power, Inc. said on Thursday that its unit Rio Norte Hydropower Corp. signed an agreement with Chinese engineering firm Xian Electric Engineering Co. Ltd. to build the former’s 19.7-megawatt (MW) run-of-river hydro project in Isabela province.

In a press release, Citicore said its top officials — Chairman Edgar B. Saavedra and President Oliver Y. Tan — inked the engineering, procurement and construction (EPC) contract with Xian Electric’s Deputy General Manager Liu Zhaohua in an online signing ceremony on March 11.

The project is expected to lower electricity costs in the area, and will complement Citicore’s plan of producing 1,000 MW of capacity from renewables in the next five years.

The construction of the hydro facility is scheduled to begin in the second half of the year, and is targeted to go on stream by October 2024.

The hydro project, which will be built at Brgy. San Miguel in Isabela, aims to supply 85 million kilowatts annually to the cities of Cauayan and Santiago and 13 municipalities, according to Citicore.

Mr. Tan said that the pandemic had caused delays to the project, but Citicore and Xian Electric “made a lot of breakthroughs” by initiating value engineering measures to optimize plant performance.

“As we proceed swiftly with the project implementation, the signing of the EPC represents a crucial milestone for the two companies, striving for common development to deliver more benefits to the host communities and power consumers, and further strengthen the comprehensive strategic partnership between Citicore and Xian,” Mr. Tan said in a statement.

Mr. Zhaohua said that Xian Electric was honored to be granted the EPC contract.

“We are optimistic that we will deliver this project with very high standard and carry out the construction as planned to help Citicore and the Philippines’ drive to energy reliability and security,” he was quoted as saying.

Rio Norte is a wholly owned unit of Citicore, which develops power and water projects in the country.

At present, Citicore has 163 MW of rated capacity from its eight solar plants. It added that it is set to construct a new 72-MW direct current solar plant in Arayat and Mexico, Pampanga, which is targeted to begin its commercial run by the end of the year.

Last month, Citicore said that it had earmarked P4 billion in capital expenditures (capex) for solar and hydro projects, with around P1.5 billion allotted for hydro projects.

Earlier, Mr. Tan said that the capex would be funded through a debt-equity scheme, as the firm plans this year to hold what could be the country’s “first power REIT offering,” referring to a real estate investment trust or an entity with various types of property assets that bring steady earnings for investors. — Angelica Y. Yang