September 2, 2011 / 4:13 PM / 6 years ago

China's GCL-Poly Energy signs $713 million loan deal

2 Min Read

HONG KONG (Reuters) - China's top polysilicon company GCL-Poly Energy Holdings Ltd said on Friday it secured loans worth $713 million from state-owned lender China Development Bank in a deal highlighting the nation's continuing support for the solar sector.

The company signed loan agreements with the bank's Hong Kong branch involving a $400 million facility, and another loan worth 2 billion yuan ($313 million), GCL-Poly said in a statement.

This is in addition to $303 million in loans granted by the bank to the company in 2010, it said.

The deal unfolds at a time when global peers are struggling under limited funding and news of bankruptcies at solar companies in the United States.

Access to cheap state loans is key to Chinese solar companies' success in building capacity and lowering costs, helping them earn market share globally.

China Development Bank extended credit lines to several solar firms totaling over $30 billion in 2010.

On Thursday, U.S. solar start-up Solyndra LLC announced it had suspended operations and plans to file for bankruptcy by next week. A Chapter 11 filing by Solyndra will make it the third U.S. solar company to seek bankruptcy protection in the last month.

Former Wall Street high flyer Evergreen Solar Inc filed for Chapter 11 two weeks ago, followed four days later by SpectraWatt Inc, a private company that was backed by Intel Corp. ($1 = 6.381 Chinese Yuan)

Reporting by Leonora Walet; editing by James Jukwey

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