News Article | October 8, 2016
Since 2007, China has loaned $57 billion to Venezuela. Most of the funds in recent years have been disbursed through the China Development Bank (CDB), one of China’s three policy banks. But this year, CDB has yet to supply the South American country with any more money. When it first began pouring money into Venezuela, China’s goal was to capitalize on the country’s resources. And for some time, both countries benefited. Along with the billions in loans, Chinese state-owned enterprises have invested about $2.5 billion a year in Venezuela since 2010. The South American country repaid in oil: It supplied China with millions of barrels a year, amounting to about 5% of China’s total oil imports. Today, things are different. Venezuela is in turmoil. It faces food shortages, power outages, hyperinflation—and oil can’t step in to save the country. Or help it pay China back. Given low oil prices, Venezuela is required to ramp up production in order to reimburse China, but that isn’t what's happening. In 2015, Venezuela was producing 2.62 million barrels of oil a day, about 20% of which were shipped to China. As of August, Venezuela’s oil production has dropped to 2.33 million barrels a day. The state oil company, Petróleos de Venezuela, SA (PDVSA), has failed to compensate producers of crude oil due to a shortage of funds. China, like other creditors, is rightly concerned that Venezuela will default on its existing loans. It still owes China $20 billion. The Wall Street Journal says that representatives from Chinese state-owned enterprises held "emergency meetings" with China’s envoy in Caracas to discuss the debt situation earlier this year. According to four officials, the message was a reluctance to invest. Data shows Chinese companies have only invested $300 million in the country in the first half of 2016. This has led to reports speculating that China will no longer lend money the Latin American country, though there has been no confirmation of such a move by official Chinese statements. In fact, China has expressed confidence in Venezuelan President Nicolás Maduro and has negated rumors circulating in the media that a Chinese government official met with the opposition party (confirmed by a Venezuelan opposition party member) to negotiate debt terms in the case of a failed Venezuelan presidency. It is in talks with the South American country to extend repayment and has committed to providing Venezuela with almost 7,000 vehicles to distribute food and medicine this year. China also sent 96 tons of medicine in May in order to build up the pharmaceutical sector. According to Venezuelan Vice President for Planning Ricardo Menendez, 131 projects have recently been undertaken in Venezuela with Chinese investment. He emphasized long-term ties between the two countries and said, "we are creating a 10-year plan, so that speaks to the confidence from both sides and the strength of this relationship." Matt Ferchen, head of the China and the Developing World Program at the Carnegie–Tsinghua Center for Global Policy in Beijing, echoes that statement: “Despite the various dysfunctions in the current China-Venezuela economic and diplomatic relationship, Chinese officials and businesspeople want to maintain long term ties. If for no other reason than Venezuela's huge oil reserves and China's continuing need for diverse oil trade partners." The bigger question then, according to Ferchen, "is not the desire or even the logic of maintaining these commercial and diplomatic relations in the long run, but how China can work with Venezuela and possibly other countries and institutions in the near term to put Venezuela back on a more sustainable path toward better economic and political governance.” It sounds like China has a long road ahead of itself, but at least it will be paved with oil. Follow me on Twitter, at @SaraHsuChina.
News Article | November 11, 2016
With the London Stock Exchange (LSE) welcoming the listing of the first ever Chinese Green Covered Bond today from the Bank of China, which raises $500m from international investors split between Asia and Europe, it is being touted as creating a “new and innovative asset class” for global investors. But more such green issuance in The City of London could be around the corner. It comes at an interesting point. Moody’s Investors Service, one of the ‘Big 3' international credit rating agencies, late this July upped its green bond issuance forecast to $75 billion (bn) globally for 2016. It had pencilled in $70bn earlier this year in April for issuance to finance low-carbon projects. The US ratings agency said that global green bond issuance reached $20.3bn in the second quarter of 2016, up from $16.9bn in the first quarter. In the first week of the month of July it was the Bank of China who initiated a blockbuster $3bn multi-currency green bond earmarked for renewable energy projects, pollution prevention, clean transportation and water management. The Bank of China’s covered bond issue in London forms part of the bank’s wider Medium Term Note (MTN) programme. Highlighting investor demand, the issue was 1.8 times oversubscribed. Net proceeds of the three-year bond carrying a 1.875% coupon, are to be allocated to ‘eligible’ Green projects across renewable energy, pollution prevention, clean transportation and sustainable water management. “Being rooted in London for 87 years, we regard it as our own mission to connect China’s promising Green Bond market with London’s vibrant capital market,” stated Tian Guoli, Bank of China chairman, at the opening of London trading on 11 November to mark the listing. He added: “This particular green covered bond connects China’s onshore green bond market with international investors, via an asset backed structure.” Simon Kirby MP, Economic Secretary to HM Treasury said: “Meeting the climate change targets agreed at COP21 in Paris requires a major rethink of how we finance projects. This [listing] is proof that the close collaboration between the UK and China is paying off and helping us tackle the most defining challenge of our time.” This latest issuance was described as “bringing to the forefront” the rapid development of strong financial links between London and China. In the last year over 64 so-called ‘Dim Sum’ bonds with a combined outstanding amount of RMB 38 billion (c.$5.6bn) that have been listed in London. It was in October last year during President Xi Jinping’s state visit to the UK that the exchange hosted the first ever international issuance of a green bond by a Chinese institution. It followed the LSE launching its dedicated green bond segments in June 2015, which established strict admission criteria aligned with the International Capital Market Association’s (ICMA) Green Bond Principles (GBP). The GBP, updated as of June 2016, are “voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach” for such bond issuance according to ICMA. Xavier Rolet, Chief Executive of London Stock Exchange Group (LSEG), noting the exchange and The City’s commitment to being leading partners in the internationalization of China’s capital markets, said: “This listing demonstrates that Chinese issuers can bring innovation to bear in exciting new areas such as green finance.” Back in June, London was selected for the listing of the first Chinese sovereign RMB bond to be issued outside of China. And, China’s four major banks and China Development Bank have all listed bonds on the LSE. LSEG joined the United Nation’s Sustainable Stock Exchanges initiative as a Partner Exchange in 2014 and also signed The Paris Pledge for Action. And, as part of the LSE’s 'Green Week', which took place last week, the bourse launched a new sustainability portal through its Global Sustainable Investment Centre. China has certainly enjoyed unprecedented growth over recent years. However, the rapid transition to a consumer-driven economy has left the country facing environmental challenges. That said, the Chinese leadership has been quick to recognize the important role green finance can play in demonstrating a commitment to sustainability. It comes after the Chinese authorities issued their 13th 5-year plan (2016-2020), which outlined key five pillars. This includes having a strong focus on tackling environmental challenges, with targets and measures to address several sustainability issues including air pollution, climate change, urbanisation and transportation. The nation’s leadership in green finance was reinforced on 31 August 2016 with publication by the People’s Bank of China of the ‘Guidelines for Establishing the Green Financial System’. The document covering 35 points and running to almost 3,000 words, spanned the banking and insurance sectors, capital markets, local finance and international cooperation. It was also undersigned by the Ministry of Finance, The Ministry of Environment Protection, the China Banking Regulatory Commission and the China Securities Regulatory Commission. Among the first five main points that the document stressed were: 1.The Importance of Establishing the Green Financial System; 2.Vigorously Develop Green Lending; 3. Enhance the Role of the Securities Market in Supporting Green Investment; 4. Launch Green Development Funds and Mobilize Social Capital through Public and Private Partnerships (PPP); and, 5. Develop Green Insurance. It also highlighted “promoting international co-operation” in Green finance, citing implementing the ‘One Belt One Road’ strategy and regional cooperation mechanisms such as the Shanghai Cooperation Organization, China-ASEAN Cooperation, and South-South Cooperation, as well as the role of the Asian Infrastructure Investment Bank and BRICs New Development Bank in leveraging private green investment. The LSEG’s recent green finance initiatives and milestones would seem to show that the sector is poised for further growth, and the exchange is well positioned for hosting more listings going forward. To date in 2016 alone, 14 new green bonds in five different currencies have raised around $5bn. And, in total forty green bonds are listed on the exchange, which have raised a combined £10.5bn. Add to that, on 7 November global index provider FTSE Russell announced the creation of a new index, the FTSE All-World Ex CW Climate Balanced Factor Index, which is the first index to combine a ‘smart’ beta factor approach alongside climate change considerations. This index has been chosen by Legal & General Investment Management for its new Future World Fund, which HSBC Bank UK Pension Scheme has selected for its equity default option, worth £1.85bn, in its Defined Contribution (DC) scheme.
News Article | November 28, 2016
NOT FOR DISTRIBUTION TO U.S. NEWS WIRES SERVICES, OR DISSEMINATION IN THE UNITED STATES. Primeline Energy Holdings Inc. ("Primeline" or the "Company") (TSX VENTURE:PEH) today announced that China Development Bank, China Export and Import Bank and Shanghai Pudong Development Bank (together the "Syndicate") have agreed to materially adjust the Company's capital repayments schedule and to reduce the Company's interest rate margin over 6 month LIBOR on its outstanding US$232 million loan facility (the "Syndicate Facility") to support the Company during arbitrations (see below). As previously announced, Zhejiang Gas, the buyer of the production from the Company's LS36-1 Gas Field refused to offtake the contract quantity and pay the price as set out in the LS36-1 Gas Sale Contract ("GSC") shortly after the field started commercial production, due to dramatic changes in the market. Thus, the Company has received substantially lower cash flow than forecast and has faced challenging financial conditions. The Company seeks to recover the substantial amounts outstanding due to it because of the disputes with Zhejiang Gas relating to GSC, and with CNOOC and its subsidiary relating to the GSC implementation and Petroleum Contract ("Disputes"). Each are the subject of current arbitration procedures. The amendments to the Syndicate Facility have deferred US$36 million of capital repayments over the 12 month period that were previously due. The Company has thus fully met the November 2016 repayment in the adjusted schedule and the loan service is maintained as normal. The Syndicate has also reduced the Company's interest rate margin from 470bps to 335bps over 6 month LIBOR from November 2016 until Disputes are resolved. Primeline is an exploration and production company focusing exclusively on China natural resources to become a major supplier of gas and oil to the East China market. Primeline has a 100% Contractor's interest in, and is the operator of, the petroleum contract with CNOOC for Block 33/07 (4,397sq km) and a 49% interest in the producing LS36-1 gas field in Block 25/34, together with CNOOC (51% interest and acting as Operator). Both blocks are in the East China Sea. LS36-1 has been in production since July 2014. Shares of Primeline are listed for trading on the TSX Venture Exchange under the symbol PEH. ON BEHALF OF PRIMELINE ENERGY HOLDINGS INC. Please visit the Company's website at www.pehi.com. Should you wish to receive Company news via email, please email firstname.lastname@example.org and specify "Primeline Energy" in the subject line. Some of the statements in this news release contain forward-looking information, which involves inherent risk and uncertainty affecting the business of Primeline. Although these statements are based on assumptions management believes to be reasonable, actual results may vary from those anticipated in such statements. If the disputes with Zhejiang Gas and CNOOC are not resolved to Primeline's satisfaction, or if Zhejiang Gas secures a lower price for gas sold thereunder or does not comply with the take or pay payment obligations, and if CNOOC and its subsidiary fail to fulfil their obligations and duties as operator and sale agents for Primeline in LS36-1, the Company's revenues or cash flow may be lower than anticipated and there may be a serious consequent adverse effect on the Company's ability to meet debt repayment obligations under the Syndicate Facility. Exploration for oil and gas is subject to the inherent risk that it will not result in a commercial discovery. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
News Article | December 2, 2016
XI'AN, China, Dec. 2, 2016 /PRNewswire/ -- SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a producer of fruit juice concentrates, fruit juice beverages and other fruit-related products, announced that it will hold its 2016 Annual Meeting of Shareholders (the "Annual Meeting") on December 29, 2016, at 10:00 AM, local time, at the Company's principal executive offices located at 16F, China Development Bank Tower, No. 2, Gaoxin 1st Road, Xi'an, Shannxi, China. As fully discussed in the definitive proxy statement filed with the Securities and Exchange Commission (the "SEC"), the Annual Meeting will be for the following purposes: (1) To elect five directors to hold office until the next Annual Meeting of Shareholders and until their successors are elected and qualified; and (2) To ratify the Audit Committee's selection of the independent registered public accounting firm for the fiscal year ending December 31, 2016; and (3) To transact such other business as may properly come before the meeting or any adjournment thereof. Stockholders of record at the close of business on November 4, 2016 are entitled to receive notice and vote at the meeting. This press release may be deemed to be solicitation material in respect of the annual meeting. In connection with the annual meeting, the Company filed with the Securities and Exchange Commission on December 1, 2016, a definitive proxy statement, which is publicly available, and has mailed such definitive proxy statement to stockholders on or about December 1, 2016. INVESTORS AND STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT AND OTHER MATERIALS FILED WITH THE SEC IN CONNECTION WITH THE ANNUAL MEETING, AS THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSALS, THE PERSONS SOLICITING PROXIES IN CONNECTION WITH THE PROPOSALS ON BEHALF OF THE COMPANY, AND THE INTERESTS OF THOSE PERSONS IN THE PROPOSALS AND RELATED MATTERS. Stockholders may access the Company's definitive proxy statement, without charge, at the SEC's website www.sec.gov. SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned subsidiary Pacific Industry Holding Group Co., Ltd. ("Pacific"), a Vanuatu company, and SkyPeople Juice International Holding (HK) Ltd., a company organized under the laws of Hong Kong Special Administrative Region of the People's Republic of China and a wholly owned subsidiary of Pacific, holds 73.42% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople (China)") and 100% ownership interest in SkyPeople Foods (China) Co., Ltd. ("SkyPeople Foods China"). SkyPeople (China) and ("SkyPeople Foods China"), together with their operating subsidiaries in China, are engaged in the production and sales of fruit juice concentrates, fruit beverages, and other fruit related products in the PRC and overseas markets. The Company's fruit juice concentrates are sold to domestic customers and exported directly or via distributors. Fruit juice concentrates are used as a basic ingredient component in the food industry. Its brands, "Hedetang" and "SkyPeople," which are registered trademarks in the PRC, are positioned as high quality, healthy and nutritious end-use juice beverages. For more information, please visit http://www.skypeoplefruitjuice.com. Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2015 and otherwise in our SEC reports and filings, including the final prospectus for our offering. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made. For more information, please contact: To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/skypeople-to-hold-annual-shareholders-meeting-on-december-29-2016-300371933.html
News Article | April 13, 2016
Almost one year ago in its annual report, troubled Chinese solar panel manufacturer Yingli Green Energy told its investors the company was facing troubled times: “Facts and circumstances including recurring losses, negative working capital, net cash outflows, and uncertainties on the repayment of the debts raise substantial doubt about our ability to continue as a going concern.” Matters have not improved this year as far as we can tell, but this blunt call for help has now been heard by the China Banking Regulatory Commission, the supervising entity for the country’s banking industry. It has asked China Development Bank Corp. to ensure a whopping $1.16 billion (7.5 billion yuan) in loans issued to Yingli to help pay off long-held debt and restructure, report PV-Tech and Bloomberg. Once the world’s biggest solar manufacturer, Yingli reported a total debt of $1.9 billion at the end of the third quarter. On its website, the company reports shipping more than 60 million solar panels representing 14 GW to more than 90 countries, including Germany, Spain, Italy, Greece, France, South Korea, China, Japan, Brazil, Australia, South Africa, Mexico, and the United States. However, declining prices without adequate revenue have generated hard times, leading to cost-cutting measures and employee layoffs. Bloomberg reports an oversupply of solar panels has seen prices tumble by almost 70% since 2010. Trina Solar Ltd. has now surpassed Yingli as the industry’s leading manufacturer, as Yingli leadership negotiates with creditors and lending entities. Will China Development Bank Corp pull Yingli out of the trenches? Drive an electric car? Complete one of our short surveys for our next electric car report. Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.
News Article | October 13, 2016
The US$24.20/MWh tender for 350 megawatts of solar in the Middle East shows the price of solar dropping by 20 percent from US$30/MWh in five months and down now two-thirds from the US$58/MWh tender awarded just 20 months ago. (Here’s the story that appeared in The National, the government-owned news organization in Abu Dhabi, and here’s some follow-up elaboration by Bloomberg News). This is real, and the rate of change is accelerating, not slowing. The question now for the coal industry: How can seaborne thermal coal compete with solar at US$24/MWh? It can’t, really, and the direction and trend of solar is clear and certain. Wondering if solar grid parity in any particular region will hit in 2015 or 2025 is irrelevant when the alternative is building new 40-year-life coal plants that take five years to commission and then are only justifiable if you assume no carbon price and no restrictions on water and air pollution over the project life. Where, then, is the financing for new coal-fired power plants in a behemoth like Indonesia coming from? The answer: via subsidized state loans from the China Development Bank and the Japan Bank for International Cooperation. Remove the subsidies—an eventuality that could very well come to pass—and the coal plants won’t be built. If and when the Asia Infrastructure Investment Bank modernizes its energy-investment paradigm and provides similar support to solar, it is game over for coal in Indonesia, the fourth most populous country in the world and the biggest exporter of thermal coal. Such support probably won’t happen for 5-10 years in Indonesia, given all the opportunities for mine-mouth coal production. But regional change will come nonetheless. Look to the governments of Vietnam and the Philippines to be worried about the effects of current account deficits of even more imported fossil fuels, and look for national economies across Asia to replicate the now firmly established trends toward renewables in the biggest economies: China, Japan and India. Indonesia will probably be one of the last to move given its well-established cheap domestic mine mouth coal model and strong demand for more electricity to underpin economic growth Stranded asset-risks are real and rising. Even the International Energy Agency, not known for bucking conventional wisdom, is now predicting that with the decoupling of electricity demand from economic growth China will see no new thermal power generation for the rest of this decade. The IEA’s own report this month shows how China coal peaked in 2013. Solar is set to attract US$100bn investment in 70GW of new installations globally in 2016. It is getting very mainstream and very cost competitive, very quickly. Buy a cool T-shirt or mug in the CleanTechnica store! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.
News Article | January 5, 2016
Faster solar growth in China will be spurred by a likely increase in long-term government targets TBEA Xinjiang New Energy and China Development Bank New Energy Science and Technology have agreed to jointly develop and build 290MW of PV capacity.
News Article | March 2, 2017
DUBLIN--(BUSINESS WIRE)--CDB Aviation Lease Finance (“CDB Aviation”), a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Limited (“CDB Leasing”), announced today the delivery of one new Airbus A320-200neo aircraft to Scandinavia’s largest airline, SAS. The aircraft represents CDB Aviation’s first delivery of a total of six A320-200neos as part of a sale and leaseback transaction with the flag carrier. "We are delighted to conclude our first deal with SAS. We admire the great work the team at SAS are doing,” commented CDB Aviation Chief Commercial Officer Patrick Hannigan. “CDB Aviation has ambitious growth plans and looks forward to doing more business with SAS." Niklas Hårdänge, SAS VP Fleet Management, commented, “We are very happy to welcome CDB Aviation as a new partner supporting the introduction of the Airbus A320-200neo into our fleet. We look forward to working with the CDB Aviation team going forward.” CDB Aviation Lease Finance (“CDB Aviation”) is a wholly owned wholly owned Irish subsidiary of China Development Bank Financial Leasing Co LTD (CDB Leasing) a 33-year-old Chinese leasing company that is backed mainly by the China Development Bank. China Development Bank is under the direct jurisdiction of the State Council of China and is the world’s largest development finance institution. It is also the largest Chinese bank for foreign investment and financing cooperation, long-term lending and bond issuance, enjoying Chinese sovereign credit rating. CDB Leasing is the only leasing arm of the China Development Bank and a leading company in China’s leasing industry that has been engaged in aircraft, infrastructure, ship, commercial vehicle and construction machinery leasing and enjoys Chinese sovereign credit rating. It took an important step in July 2016 to globalize and marketize its business – listing on the Hong Kong Stock Exchange (HKEX stock code:1606).
News Article | February 23, 2017
DUBLIN--(BUSINESS WIRE)--CDB Aviation Lease Finance (“CDB Aviation”), a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Limited (“CDB Leasing”), announced today the delivery of one new Boeing 737-800 aircraft to a Chinese carrier, Shandong Airlines. The 737-800 represents the carrier’s eighth aircraft on lease from CDB Aviation and signifies the 100th Next Generation aircraft added to the growing fleet of the Jinan, Shandong-based airline. Peter Chang, CDB Aviation President & Chief Executive Officer, commented: “We are very pleased to deliver this new Boeing aircraft to our long-term partner Shandong Airlines which will further strengthen the carrier’s route network and provide valuable operational flexibility. CDB Aviation remains steadfast in our continued growth efforts and commitment to broadening our offering to provide airline customers in all markets around the world with the most comprehensive leasing services.” Mr. MIAO Liubing, General Manager of Shandong Airlines commented: "We are very delighted to partner again with CDB Aviation on our development path to expand our 737 fleet. The lease of this 737-800 is a significant milestone for us and will help us continue to strengthen our market share in China. We expect to continue this long-term partnership with CDB Aviation into the future.” The news follows recent appointments of key executives to CDB Aviation’s leadership team as part of a new strategic direction in positioning the company as a leading global aviation leasing business. Chang added that “CDB Aviation will soon make another major announcement of additional industry heavyweights to join its management team as the company accelerates momentum in executing on its strategy to innovate and benefit its airline customers globally.” CDB Aviation Lease Finance (“CDB Aviation”) is a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Limited (“CDB Leasing”), a 33-year-old Chinese leasing company that is backed mainly by the China Development Bank. China Development Bank is under the direct jurisdiction of the State Council of China and is the world’s largest development finance institution. It is also the largest Chinese bank for foreign investment and financing cooperation, long-term lending and bond issuance, enjoying Chinese sovereign credit rating. www.cdbaviationleasefinance.com CDB Leasing is the only leasing arm of the China Development Bank and a leading company in China’s leasing industry that has been engaged in aircraft, infrastructure, ship, commercial vehicle and construction machinery leasing and enjoys Chinese sovereign credit rating. It took an important step in July 2016 to globalize and marketize its business – listing on the Hong Kong Stock Exchange (HKEX STOCK CODE:1606).
News Article | February 14, 2017
Goldwind, the leading Chinese wind turbine supplier with big ambitions for the US market, qualified enough equipment in 2016 to build 1GW of future wind capacity eligible for the full production tax credit (PTC), a senior executive reveals. Goldwind, by some estimates the world’s largest wind turbine maker in 2015, has long had its eye on the US, and at one point was considering building a factory in this country, the world's second largest wind market after China. While the factory never materialised, Goldwind's attempted US push appeared to gain traction last year after the company acquired a well-advanced 160MW wind project in Texas from RES Americas and then announced an exclusive supply deal with a local developer in Wyoming for a project that could eventually reach nearly 2GW in size. “We’re a supplier of turbines but we’re also very much interested in investing in late-stage, construction-ready projects,” David Halligan, chief executive of Goldwind Americas, said last week at the Wind Power Finance & Investment summit in California. Halligan says the election of Donald Trump and the attendant policy uncertainties have not changed Goldwind’s general outlook or approach to the US market. “Prior to the election we set about a programme of safe-harbouring equipment [for the PTC]. Post-election we did not change that programme.” “We’ve set aside approximately 1GW of equipment to be installed over the next four years,” Halligan says. “We’re very much bullish on the US market.” Halligan did note, however, that the US election has forced Goldwind to “recalibrate” some of its wind-financing arrangements. And the prospect of a border-adjustment tax as part of a Republican-led overhaul of the US tax code is potentially worrisome to the Beijing-based company. “We are – and have been – active in financing a couple of projects,” Halligan says. “Pre-election we had a structure in place, and with the election we had to recalibrate.” “I’d say the banks we’ve been working with have been very co-operative in helping us through that, but obviously it creates a lot of uncertainty, and we have a very complex structure which tries to anticipate [future] changes in legislation.” Goldwind is far from alone among developers in having had to readjust wind deals after the election. Some wind tax-equity investors are already known to be pricing based on a lower future corporate tax rate, according to Keith Martin, a partner at law firm Chadbourne & Parke. And in some M&A deals, buyers are asking for "schmuck insurance", allowing for a one-time price reset after any tax overhaul is enacted, Martin says. “Generally speaking, I’m in favour of lower corporate tax rates,” Halligan says. “And having been in the wind industry for close to 15 years, I can say that having subsidies that are pinned to tax policies is always dangerous – and here we are.” “But certainly any form of border tax, I think the complexity of the application of that is going to be very difficult,” he says. “It’s something I think we’d be concerned with.” Goldwind installed a single 1.5MW turbine in the US in 2016, according to new figures from the American Wind Energy Association. The US turbine market was led by Vestas, followed by GE and Siemens. Last spring Shenzhen-listed Goldwind secured up to $1bn worth of loans from the China Development Bank to boost its international expansion plans.