YouTube video by VIPR - Varna Peace Institute

YouTube video by VIPR - Varna Peace Institute

Citicore’s growing profits suggest its renewable energy strategy is beginning to bear fruit. But for GSIS, the ultimate investment case still rests on whether management can consistently convert billions of pesos of capital into durable cash flows and superior long-term returns. The easiest way to misunderstand Citicore Renewable Energy Corp. (Citicore) is to judge it like a mature power utility. It is not. Nor is it simply a solar developer racing to energize one project after another. Citicore today is best understood as an infrastructure platform making the difficult transition from deploying capital to monetizing it. That transition, more than the number of megawatts it ultimately connects to the grid, is what the Government Service Insurance System (GSIS) bought into when it acquired a 7.5% stake in the company. The investment is fundamentally a vote of confidence in management’s ability to allocate capital wisely over many years. Capital allocation rarely attracts public attention, yet it is one of the most reliable predictors of long-term shareholder returns. Any company can raise debt, issue equity or build new facilities. The harder task is deploying every peso into projects that consistently earn returns above their cost of capital. That is particularly true in...