Although the process of financialization of China's energy-saving and new energy has just begun, it will undoubtedly instill a strong boost for the entire industry that is in the “technical waiting period†and lacks multiple financing channels—financial innovation means flowing into the new energy field. Financial and private capital were allowed to open, and new energy projects waiting for funds to start were started.
12219 billion opportunities
In early 2013, Liu Wenping, who worked for the US investment bank PacificCrest Securities for 5 years, resigned from the position of vice president of the US stocks research department and started his business. His chance of seeing is a huge demand for financing businesses in China's new energy sector in the coming years.
The newly established company named Jingjing Capital is the first financial consultancy company in China that provides financing solutions specifically for solar energy related industries. Liu Wenping hopes to open up the channel between the new energy industry and financial capital through the design of financial products and innovative guarantee methods.
“In the 12th Five-Year Plan period, China will need at least 300 billion yuan to complete a 35GW installation target in solar energy alone. It is impossible to rely on bank financing for such a large amount of money, which provides huge room for other financial innovations.†Liu Wenping’s Southern Weekend The reporter said.
Over the past six months, not only individual entrepreneurs, but also a growing number of large financial institutions in China have discovered that the financial needs of energy-saving and new energy fields are rapidly increasing. Researcher Li Chengbiao of Industrial Bank's Sustainable Finance Department told the Southern Weekend reporter that since Industrial Bank decided to "upgrade" the contracted energy management (EMC) financing product from a pilot to a standardized product in December 2012 (ie, under the contract energy management contract The future income right pledged as a collateral to effectively alleviate the financing difficulties of energy-saving projects. The number of customers that have raised financing requirements has reached dozens.
Xu Yuhui, chief risk control officer of Beijing International Trust, also found that the financing needs of EMC projects have recently increased rapidly, which is also a “very big opportunity†for trusts. There are also securities companies that are excited. According to the Southern Weekend reporter, many domestic securities companies are exploring the securitization of energy-saving and new energy assets. This kind of energy-saving or new energy assets is made into an asset pool, which is then generated by the asset pool. The cash flow to support the new financing method of issuing securities financing in the financial market will help to invigorate energy-saving and new energy assets and reduce financing costs.
On April 1, a report on China's financing strategy on climate change issued jointly by the Climate and Energy Finance Research Center of the Central University of Finance and Economics and the Climate Group in Beijing pointed out that by 2015, China will face a funding shortfall of 1221.9 billion yuan. This is equivalent to 1.88% of China's total GDP in 2015. This means that the government needs to invest more public finances, and it also provides a huge space for the development of financial markets and private capital.
Wang Yao, director of the Center for Climate and Energy Finance at the Central University of Finance and Economics, who participated in the report, said that the process of financialization of China's energy conservation and new energy has just started. "In addition to the usual financing methods such as banking, venture capital, and listing, many financial institutions are exploring how finance integrates with energy-saving and new energy fields, including insurance, bonds, securitization, financial leasing, and derivatives." Wang Yao said.
Global in action
The trend of financialization of energy-saving and new energy has not only appeared in China.
“Recently we have seen that new financial instruments have begun to appear in various countries and new cases have been looked for,†said Wu Changhua, president of the Climate Group’s Greater China Region. The sound financial system and legislative guarantees have gradually made the industry more accessible to European and American financial markets. Go to the mainstream.
On March 19, 2013, the National Renewable Energy Laboratory (NREL) under the United States Department of Energy (DOE) announced the establishment of the "Solar Access to Public Capital" working group (SAPC) to promote solar photovoltaic power generation assets. Securitization.
This move was largely due to a letter sent by the 29 Senate members to President Barack Obama in December 2012. The members of the Senate called on the federal government to prioritize the use of real estate investment trusts (REITs) and owners of limited partnerships in the U.S. energy strategy. (MLPs) These two financial instruments.
Once the above two models are successfully tested, it means that a large number of financial and private capital flows to the new energy sector will be opened, and more new energy projects waiting for the activation of funds will be started. In a column in the New York Times titled "How to Make Renewable Energy More Competitive," researchers at the Steyer-Taylor Energy Policy and Finance Center at Stanford University further calculated that the above two financial innovations will make new Energy financing costs are reduced by 80%.
According to the Southern Weekend reporter, the number of new energy companies and financial institutions currently joining the SAPC working group has increased to more than 50, including Citibank, Morgan Stanley and Credit Suisse. SAPC hopes to bring together its global peers, including China, to promote the securitization of new energy assets. In China, in March 2013, Shanghai Securities and SOLARZOOM jointly launched the asset securitization business in an attempt to attract more Chinese small and medium investors to invest in new energy.
In the past month, two companies whose business model is similar to the above two financial innovations have been successfully listed in the United States and the United Kingdom. The Hannon Armstrong Suainable Infrastructure Capital (HASI) focuses on financing for energy-saving and new energy products; the UK Greencoat Fund The company is focused on acquiring operational wind assets, which has become Britain's largest IPO in renewable energy to date.
The trend of market-based financing
The reason why more and more people are paying attention to the combination of energy saving, new energy, and financial capital is related to the stage of the global green wave.
Today, the manufacturing industry of energy-saving and new energy products is relatively mature, and even there are relative surpluses in wind power and solar energy products. An investor who invests in clean technology uses the "technical waiting period" to describe the current situation. With the deepening of the application of energy-saving and new energy products, people's attention has gradually shifted from technological innovation to financial innovation.
In China, the escalation of financial innovation trends is related to the official intention of improving the climate financing structure. According to the “China's Fighting Climate Change Financing Strategy†report, in recent years, with the reduction of international climate funding, domestic public finance funds are playing a leading role. Internationally, the main force of international climate finance is private private capital. According to statistics, private funds accounted for 217 billion U.S. dollars in global climate financing in 2011, which is 10 times the total amount of public funds.
“Marketization of climate financing in the future is a general trend.†Jiao Xiaoping, deputy director of the China Clean Development Fund Management Center, told the Southern Weekend reporter that currently the Clean Fund actively promotes the Public Private Partnership (PPP) model and promotes diversification of market innovation financing. Facilitate the entry of social funds.
At the same time, the gradual liberalization of China’s financial markets has also further strengthened this trend. On March 15th, the Securities Regulatory Commission formally issued the Regulations on the Management of Asset Securitization Business of Securities Companies, proposing property rights such as corporate receivables, credit assets, trust beneficiary rights, infrastructure income rights, commercial paper, bonds, stocks, etc. "Real estate assets such as marketable securities, commercial properties, etc." can be used as basic assets that can be securitized.
This means that the securitization business of the securities company has finally officially started. Prior to this, under the influence of the US subprime mortgage crisis, asset securitization was viewed by the Securities and Futures Commission as the object of caution.
Encouraged by this policy, a number of brokerage companies are developing and developing securitization products that will yield the benefits of energy efficiency services, wind farms, and solar power plants. This move will not only be welcomed by the project owners who are short of money, but also the securities companies that engage in the business can earn interest rates from it. As the business is still in its infancy, investors who purchase the above financial products will take certain risks.
As the financial institutions wait and see, maturity still needs more “熬â€
In April, South Korea's Export-Import Bank (KEXIM) issued the first "green bond" in Asia, and $500 million of green bonds went public. Investors flocked and demand was more than three times the amount of supply, reaching $1.8 billion. . The pursuit of investors has been assessed by the media as “a sign of increasing interest in investors for pollution and climate projects in China and its neighboring countries.†The so-called “green bond†is a financial instrument that is specially financed for climate-friendly projects such as clean energy.
The Bloomberg New Energy Finance report said: "This year will be a record year for green bonds. Excessive subscription to green bonds does exist, and green bonds are in short supply." In 2009, the World Bank issued the first phase of green bonds, and so far. Still the biggest issuer. Those that have issued green bonds include the European Investment Bank and the Asian Development Bank.
However, international optimism has encountered difficulties in China. According to an anonymous financial industry source, after a large Chinese bank tried to issue its first "green bond," it ended up failing. In a country where the pollution problem is more prominent, investors seem to have Not so interested.
In fact, most financial institutions are currently waiting to see the development of various financial instruments in the area of ​​energy efficiency and new energy.
Xu Yuhui, chief risk control officer of Beijing International Trust Company, has been in contact with the green project for seven to eight years. She deeply touched on the obstacles that financial institutions have to the risk perception of green projects. “The financial community and the environment and the energy industry don’t understand each other. What to say is a bit like talking about chickens and ducks.†Xing Yuhui told the Southern Weekend reporter that China is now in urgent need of cross-industry environmental finance talents.
For financial institutions, the uncertainty in China's new energy policy has led to hesitation in energy conservation and new energy. This is a more fundamental obstacle. Liu Wenping said that because the renewable energy law has not been implemented, the “power cuts†and subsidy defaults encountered by wind power and solar power plants have greatly reduced the value of power plant assets. Even many banks do not think power plant assets are “valuableâ€. This has led to securitized new energy assets instead of becoming a "low-yield, high-risk" product.
“The level of financialization in energy-saving and new energy fields is closely related to the maturity of these two systems.†Liu Wenping summed up the experience of the past two years and said that sometimes it is not the lack of innovative capacity of financial institutions, but the entire ecosystem. Immature. Despite the recent emergence of various innovative financial instruments, its large-scale commercialization still requires both to mature.
"If the manufacturing of energy-saving and new energy products is compared to the sea and land forces, financialization is likened to the Air Force, Europe and the United States have already fought in the air, land and air. We are still on the ground," said a person in the new energy industry.
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