China CSP Industry is going to blossom in accordance with the upcoming FiT policy, expectations from industrial players are about to come true, bringing this new emerging CSP market a bright future. The following issues are concerns about the details and qualities of the first round demonstration projects. Obviously, lots of problems are still hanging before the market booms.
The first and most crucial point is large capital demand. Compared to the mature PV and wind power industries, CSP projects need large amount of investments, though it has achieved great improvements to cut down the cost due to technical progresses. Billions of funds requirements could easily prevent private companies entering into the industry. Zhejiang SUPCON, one of China private CSP leaders, owns Delingha 10MW power tower project, which did not get any funds support and paid around RMB200 million by itself; Another pioneer, SUNCAN’s Dunhuang 10MW MS tower project (expected to operate this Aug.) costs RMB410 million, and it’s second phase 100MW MS tower plant is estimated to cost around RMB3 billion. Despite rich capital of state-owned enterprises, exorbitant investments and risk of profits let decision-makers be more cautious. One of the representatives is CGN Solar, it chose the most mature parabolic trough technology for its Delingha 50MW power plant, and the cost for this project is about RMB 1.9 billion.
Facing such a large capital need, financing issue becomes the key point for developers and investors. Good news is that government’s attention on CSP is being enhanced. National Development Bank, one of the 3 policy banks, shows great concern on CSP and declares full support on this industry. What’s more, commercial banks who are typical risk aversers are especially expectant. But problems like avoiding non-performing loan and guaranteeing stable return are their consideration because of unfamiliarity. Besides, non-lending, foundation, VC/PE, internet financing and other possible mechanisms occupy their own seats when pushing the industry moving forward.
For the investors, how to dispel commercial banks’ doubts? How are financial leasing companies, insurers, bonding companies engaged in so as to avoid financing risk? Could some new mechanisms like Asset backed securitization, YieldCo be feasible at the present stage? How to ensure the stable income? All of these questions tug at heartstring of investors. Meanwhile, for the project side, how to reduce financing cost? How to attract investors’ attention? What problems need to be considered? Those are the issues needing to be faced. In order to solve the problems, relevant players will gather together in CSP Focus Financing Forum (Sept.22-23, China), discussing the difficulties and questions on CSP financing, trying to find out possible solutions. The Forum is expected to provide a communication channel, to pave the way for CSP’s next stage development, to offer a valuable platform for your prospective decision-making.
