19 January 2019
United Photovoltaics inked a preliminary pact with UNDP in September 2016 to jointly build so-called Panda Solar Power Plants. Photo:
United Photovoltaics inked a preliminary pact with UNDP in September 2016 to jointly build so-called Panda Solar Power Plants. Photo:

United PV rides China’s Belt and Road push

Numerous companies related to China’s Belt and Road initiative posted improved results for 2016. This has, in turn, helped spark renewed interest in the economic plan heavily promoted by Beijing.

Among the entities associated with the Belt and Road theme is United Photovoltaics (00686.HK), a unit of China Merchants Group. The solar power operator reported a 58 percent jump in revenue last year.

In September 2016, the group signed a memorandum of understanding (MoU) with the United Nations Development Programme (UNDP) to jointly build so-called Panda Solar Power Plants.

Construction of the first such park, a 50-MW solar park in Datong, Shanxi province, has already begun.

The Panda Solar Station was initiated by UNDP and China Merchants New Energy as well as leading energy companies. It’s part of the efforts under China’s Belt and Road initiative.

As Beijing’s initiative has gradually gained recognition and support worldwide, we might see more and more Panda Solar Power Plants in nations along the Belt and Road routes in future.

United PV has appointed Zou Yiqiao, the former head of the International Department of China’s National Energy Administration, as the Belt and Road chief consultant and strategy committee chairman. The company hopes to leverage his experience and contacts to achieve overseas expansion.

Also, United PV has acquired six solar power plants with total installed capacity of about 82.4 MW in the UK. All power plants started operation in first quarter in 2015 and received British renewable energy certification, valid for 20 years.

In March, China Merchants New Energy, together with parties acting in concert, increased the stake in United PV to 27.84 percent. It remains the largest shareholder.

Meanwhile, ORIX Corporation (ORIX) and Asia Climate Partners (ACP) bought approximately 14.97 percent and 4.64 percent of United PV respectively, becoming the second and the third largest strategic shareholders.

ORIX, Japan’s largest renewable energy investor and operator, has more than 7GW of renewable energy capacity around the world.

As for ACP, it is a climate fund jointly initiated by the Asian Development Bank, Robeco and ORIX in 2014 to invest in clean energy, resource efficiency and environmental protection.

Belt and Road is going to be a multi-year investment theme. Many relevant firms are yet to be included into the Shenzhen-Hong Kong Stock Connect program. Against this backdrop, investors should seek out entities that have good chance of making it to the stock link program in the future.

This article appeared in the Hong Kong Economic Journal on April 10

Translation by Julie Zhu

[Chinese version 中文版]

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Senior investment banker

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