China’s JinkoSolar Holding Co. has signed an agreement with China Development Bank Leasing Ltd. to offer financing lease for 1 gigawatt of solar projects.
Finance leasing for solar project has been hugely popular, but is in infancy stages in China. In such a scheme, a lender will acquire the project and rent it back to the developer for an agreed lease period. The developer will sell electricity from the project for a period. The lender has the option to sell the project to the developer after the period or to retain or sell it by itself.
According to the terms of the agreement, China Development Bank Leasing will provide financing support for at least 200MW worth of projects annually up to an aggregate amount of at least 1,000 MW worth of projects by 202. A green channel mechanism will be set by both parties to closely monitor the development of projects, financing and communicate issues with each other. Financial leasing contracts will be signed for specific projects.
“Financial leasing has the potential to greatly revolutionize PV project financing,” said Xiande Li, Chairman of JinkoSolar. “By cooperating with CDBL, we are broadening our financing channels. PV financial leasing is still in its early stages in China and is complementary to the traditional financing we get for the construction of our PV power plants.
“It effectively reduces the financial pressures faced during project development, improves the liquidity of our project assets and ensures investment returns for both parties. By working with CDBL, we aim to promote the healthy development of PV project financing in China.”