Connect with us

Hi, what are you looking for?

CleanTechnica
China Development Bank is stepping up its international lending to leading Chinese solar power companies even as the industry is being rocked by a glut of solar photovoltaic (PV) modules and heightened uncertainty of government support in key markets. LDK and its US subsidiary SPI Solar announced CDB is providing them financing totaling $64 million to carry out solar PV project development in California and New Jersey.

Clean Power

China Development Bank Finances LDK-SPI Solar International Expansion Plans

China Development Bank is stepping up its international lending to leading Chinese solar power companies even as the industry is being rocked by a glut of solar photovoltaic (PV) modules and heightened uncertainty of government support in key markets. LDK and its US subsidiary SPI Solar announced CDB is providing them financing totaling $64 million to carry out solar PV project development in California and New Jersey.

Photo courtesy LDK Solar

Roseville, California-based SPI Solar, a US subsidiary of China’s LDK Solar, today announced it has secured $44 million in construction financing from China Development Bank (CDB) to carry out solar photovoltaic (PV) projects with KDC Solar in New Jersey. Separately, LDK secured $20 million in CDB financing for two projects in California for which its providing engineering, construction and procurement (EPC) services to SPI.

SPI and LDK last June announced that they would provide construction financing and “facilitate” long-term financing, supported by LDK, of up to $750 million for solar energy facility (SEF) projects as part of their preferred provider agreement with New Jersey’s KDC Solar.

CDB Financing US Solar

China Development Bank is the Chinese government’s economic development bank. As such, it’s the only Chinese bank authorized to issue corporate bonds, short-term commercial paper, super-short-term commercial paper, medium-term notes, packaged SME notes, and the underwriting of private placement bonds.

One of CDB’s strategic focal points is financing emerging industries in China, which includes solar power and other forms of clean energy. In line with China’s “Go Global” export-oriented policy directives, it’s been scaling up its international lending, with its book of outstanding domestic and foreign currency loans totaling RMB 4.51 billion (~USD 714 million) as of year-end 2010.

CDB’s been expanding credit rapidly in recent years. Total funding reached RMB 1.78 trillion (~USD 283 billion) in 2010. Issuance of RMB-denominated debt securities rose from RMB 365 billion (~USD 58 billion) in 2005 to 855 billion (~USD 135 billion) in 2010.

An increasing proportion of that has been coming from international investors and foreign currency denominated debt securities. Of the 2010 total, RMB 5 billion (~USD 794 million) was issued in Hong Kong’s international market, while foreign currency-denominated debt securities issuance amounted to USD 86.2 billion.

CDB has supported LDK’s growth into one of China’s largest integrated solar PV companies since the solar power company’s founding in 2005, and continues to do so now, when LDK is struggling to stay solvent amid the collapse in solar PV cell and panel prices and growing uncertainty regarding government support for solar power in key markets worldwide. Without that support, it’s likely that both companies would be scaling back, rather than expanding, amidst an industry shakeout and a possible drop in demand that’s put LDK on the verge of insolvency.

LDK-SPI US Solar Expansion

For its part, SPI is adding to its large-scale solar project pipeline both domestically in the US and internationally and is applying to CDB for additional financing. On Jan. 3, SPI announced it had been awarded an EPC contract by New Jersey’s Seashore Solar Development LLC for an 11.3-megawatt (MW) fixed ground mount SEF in Egg Harbor Township that will supply clean, renewable electricity to southern New Jersey’s power grid.

In addition to helping meet the clean energy targets established in the state’s Renewable Energy Portfolio Standard, the Egg Harbor SEF is expected to create some 200 local jobs during construction. Construction is due to begin in the first quarter contingent upon Seashore Solar closing project financing.

“Our successful relationship with CDB is a direct result of our close working relationship with LDK,” said Steve Kircher, CEO for SPI Solar. “As we continue to develop our pipeline of projects globally, our partnership with CDB grows stronger.”

China and the CDB are in a much better fiscal position to adopt counter-cyclical economic policies than is the case in the US or European Union (EU). Stepping up government support now, at a time of flagging demand and deflationary forces at work, is the correct Keynesian macroeconomic policy response. Having provided monetary and fiscal stimulus in both credit expansions and contractions, the US and EU are much more limited in their ability to pursue such a course now when it’s needed.

For better or worse, the US and EU aren’t able, or as prone, to employ further fiscal or monetary stimulus, nor would it be likely to work to as great effect as in China given the burden of accumulated debt and leverage that’s been accumulated in the US and EU during the past decade and more.

 
 
Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

New Podcast: Cruise Talks Autonomous Driving Tech, Regulations, & Auto Design

New Podcast: Battery Mineral Mining Policies & Regional Trends

Written By

I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.

Comments

#1 most loved electric vehicle, solar energy, and battery news & analysis site in the world.

 

Support our work today!

Advertisement

Power CleanTechnica: $3/Month

Tesla News Solar News EV News Data Reports

Advertisement

EV Sales Charts, Graphs, & Stats

Advertisement

Our Electric Car Driver Report

30 Electric Car Benefits

Tesla Model 3 Video

Renewable Energy 101 In Depth

solar power facts

Tesla News

EV Reviews

Home Efficiency

You May Also Like

Clean Power

California has more solar power installed than any other state — by far. It is also first in terms of percentage of the state’s...

Clean Power

Courtesy of NRDC By Mohit Chhabra and Julia de Lamare California leads the nation in fighting climate change because of state policies that have...

Clean Power

As of December 2020, the states with the most small-scale solar photovoltaic (PV) capacity were California (10.6 gigawatts (GW)), New Jersey (1.9 GW), and...

Clean Power

In October, I published reports on the top US solar states per capita, the top US solar states as a percentage of electricity, and...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.