China Gogreen fires up solar investment plan
China Gogreen Assets Investment, a money lender and solar farms developer, plans to acquire and develop 70 megawatts of solar farms this year costing up to 175 million yuan (HK$219 million).
The company, which has 31.5MW of projects up and running in Qinghai and Henan provinces, aimed to have 500MW of solar power generating capacity in five years, chief executive Hunter Jiang You said.
Despite concerns about delays in connecting mainland solar projects to power grids, Jiang said monopoly distributor State Grid Corp of China issued a notice late last year supporting the development of small-scale rooftop solar farms - China Gogreen's main business focus. The notice said State Grid would support projects of less than 6MW that met certain technical requirements by giving them priority in grid connection at no cost.
Power from such projects should mainly serve local demand, with surplus electricity sold to the grid.
Jiang also said that to minimise risk, China Gogreen would only buy projects that already had central government subsidies and had secured power sales agreements.
Each watt of capacity is estimated to cost 8 yuan to build, of which 5.50 yuan is subsidised by Beijing, leaving the project developer to invest just 2.50 yuan.
China Gogreen has signed three preliminary agreements to buy and develop 112.4MW of solar farms in Henan, Ningxia autonomous region and Shenzhen.
Jiang said the deals could take up to six months to finalise.
The firm had HK$260 million in cash as of the end of last year.
It recently raised HK$366 million by selling shares to senior managers, and lent HK$120 million to mainland renewable energy firm Hanergy Investment at an annual interest rate of 7.5 per cent. It aims to turn in a profit this year after a net loss of HK$418 million last year.