HONG KONG (Reuters) - China’s top solar power equipment makers Suntech Power Holdings and Trina Solar have signed framework agreements with China Development Bank (CDB), giving them access to a combined 80 billion yuan ($11.72 billion) in loans, company officials said.
Suntech, China’s largest solar cell and panel maker, signed an agreement with CDB for up to 50 billion yuan ($7.33 billion) worth of loans over five years, Rory Macpherson, Suntech’s director for investor relations, told Reuters on Wednesday.
“It’s a non-binding agreement,” he said. “It’s not related to specific projects ... it could be used for capacity expansion. It essentially shows the strong partnership between Suntech and China Development Bank,” he said, adding that the agreement was signed in the past two weeks.
Trina Solar forged a 30 billion yuan ($4.40 billion) loan agreement with CDB that will last through 2015, Chief Financial Officer Terry Wang said.
Such deals are unfolding as China aggressively develops its renewable energy sector and as its companies play catch-up with bigger global peers including German solar cell producer Q-Cells AG and Spanish wind farm operator Iberdrola, which have built up solid track records, also with help from more than a decade of government subsidies.
“As we accelerate global reach to Europe and the U.S. and as we widen our base among top markets, we could use the loan for market expansion,” said Wang. “We’re looking at projects overseas.”
He said Trina Solar hoped to boost its share of the solar products market to 9 percent this year, up from 6.2 percent last year, adding, “Next year, we’re aiming for a double-digit expansion.”
Suntech is expanding capacity and lifting sales in the U.S. market, which some analysts say could double in size this year. The company aims to boost its share of the U.S. market to 20 percent in 2010, from about 15 percent last year.
The solar industry is rebounding from a difficult 2009, when solar panel prices fell and the financial crisis choked off funding for new projects.
Chinese players and Canadian Solar Inc have seized on rising demand, turning their low-cost structures into sales, and several are planning to lift production capacity in 2010. But financing remains a sticking point for many projects.
Suntech aims to ship more than 1.25 gigawatts of photovoltaic products this year, a jump of nearly 80 percent from 704 megawatts in 2009, as it raises production capacity to 1.4 GW by the middle of the year.
Increasing global demand has prompted Trina Solar to increase its production capacity of cells and modules from 600 MW by the end of 2009 to between 850 MW and 950 MW by the end of 2010.