Solar Energy Center

By: Simon Dockrell
In October a little known Chinese firm won a contract to supply wind turbines for a 600 megawatt Texan wind farm. A-Power Energy Generation Systems have told Ovannis Capital’s senior analyst in Hong Kong how they had an Ace up their sleeve which allowed them to clinch the deal, they went to the table armed with $1.5 billion in financing from the state run banks in China.

What A-Power Energy Generation Systems have over their competitors is access to cheap loans, renewable energy firms in China are getting a massive boost from Beijing allowing clean energy projects around the world to be won by the Chinese. Most of the support comes in the shape of low interest loans from the big state run banks in China

Ovannis Capital analysts say this support is giving China’s renewable energy firms the edge over their Asian rivals such as Japan Wind Development, Suzlon from India and Infigen Energy from Australia. They are also able to take on European heavyweights from Germany and Denmark. Most analysts think that none of this would have been possible without access to cheap financing.

Shares of A-Power Energy Generation Systems hit a 15-month high after winning the contract with the Texan wind farm. A-Power Energy Generation Systems only entered the wind turbine market in 2008.

Ovannis Capital’s analysts say more deals like this will occur more often as long as China aggressively develops the renewable energy sector. Most of China’s energy renewable companies already have access to just the kind of low interest loans as A-Power Energy Generation Systems have received. Interest rates on the loans for wind power can be 10 percent lower than the prevailing benchmark rate set previously by the People’s Bank of China.