Banks provide Hanergy with US$3.3 billion line of credit

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Hanergy Group has secured financing from several Chinese banks totalling around 20 billion yuan (US$3.3 billion), according to reports, as it looks to become a major PVEP (PV Energy Provider) employing a-Si and CIGS thin-film technology for downstream PV power plants.

The China Minsheng Banking Corp., and the Asia Financial Cooperation Association (AFCA) were said to be providing the funding in the form of various lines of credit over the next three years to Hanergy.

The financing is needed to execute ambitious plans to scale thin-film module production for utility-scale, commercial, residential and BIPV markets, primarily intended for the China domestic market but also internationally.

“Having been in acquisition mode for the last couple of years, Hanergy is slowly moving towards the next stage in its CIGS plans. Until now, the only requirement has been capital, with no shortage of CIGS companies globally looking for their white knight,” said Finlay Colville, vice president of NPD Solarbuzz to PV Tech. “As Miasole, Solibro and Global Solar unveil lab-based efficiency claims, Hanergy has been busy getting shareholder approval and ring-fencing the necessary funds to add capacity for each of these subsidiaries.”

However, Colville also pointed out that the new lines of credit were not sufficient to meet all of the capital requirements for Hanergy to deliver on its plans.

“Ultimately, in order to succeed with its CIGS plans, Hanergy may well have to find several billion dollars more in order to create its own downstream project pipeline into which the output from its CIGS fabs can then be sold into. While capital-intensive, the long-term viability of this option does remain a distinct possibility. However, at the back of everyone's mind is the track-record for Hanergy's amorphous-silicon thin-film plans that are yet to show any strong signs of coming to fruition,” added Colville.

Although the Chinese Government has boosted its commitment to PV in 2013, increasing installation targets and shifting emphasis to distributed generation the Chinese market is currently dominated by established c-Si PV manufacturers and the vast majority of large-scale projects built and planned are using c-Si PV modules.

Cost and availability of bankable PV modules remain at the forefront for successful project development in China.

According to Colville: “It remains a mystery however that Hanergy is still using outdated market-research from several years ago that projected CIGS to have a massive market-share in the PV industry going forward. Current market-research paints a very different picture for thin-film activity, with the entire forecasting methodology having changed radically in the past few years. The end-market is essentially technology-agnostic, with module deployment driven by a range of other factors. Simply scaling CIGS capacity to multi-GW volume and expecting there to be a CIGS-specific market-segment to sell into is a highly dangerous strategy for any CIGS company today.”

However, Hanergy seems to be banking on the fact that Chinese authorities are backing the adoption of PV both to address the overall energy needs of the country as well as the requirement to meet some of that demand from renewable energy sources.

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