Toronto-based Canadian Solar Partners and Sichuan Development, the Sichuan provincial government’s investment management holding company, are hoping to raise RMB5 billion (€630 million; $810 million) with third-party investors to fund solar panel parks in the province.
The solar fund will be Canadian Solar’s first step into China where it will focus primarily on utility-scale and distributed generation solar projects in the province as well as other solar-resourceful regions in the country. Sichuan Development Holding Co. Ltd has over RMB23 billion of assets under management and is expected to provide support to facilitate project development and financing for the fund.
“This partnership will leverage Canadian Solar’s proven track record in developing and building solar power plants on a global basis with Sichuan Development’s financial strength and credibility to create an industry leader well positioned to participate in the expected growth in the adoption of solar energy in China,” said Dr. Shawn Qu, chairman and chief executive officer of Canadian Solar.
Canadian Solar’s move into the Chinese market may be followed by many others as Beijing’s recent renewable energy legislation pushes solar and wind power development to the forefront of the country’s priorities for its energy mix. Furthermore, credit agencies have begun covering the country’s power sector, providing more transparency on the credit worthiness of power grid utilities.
The announcement follows Canadian Solar’s disinvestment from Northstar Renewable Power’s Stone Mills Solar Park, a 50,000-panel facility generating 11MWdc (megawatts of direct current) in August this year, as well as a Moody’s report announcing positive prospects for renewable energy generating companies in China, issued a few days earlier.
According to the report, the Renewable Energy Law obliges grid companies to purchase all electricity generated from renewable power plants approved by the government. It also grants wind and solar power-generating companies tariffs significantly higher than those for thermal power-generating firms operating in the same region.