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Solar-Backed Bond Opens New Path for Renewable-Energy Financing

  • China raised $152 million in solar asset-backed securities
  • Securities are backed by 200 megawatts of solar farms

About seven months ago, a unit of Shenzhen Energy Group Co. started looking for ways to find new sources of capital for solar plants that wouldn’t compete for cash with its parent company’s hydro and coal projects. The answer was a new kind of security and a first for China.

A unit of the company called Shenneng Nanjing Energy Holding Co. raised 1 billion yuan ($152 million) last month by selling the nation’s first securities backed by solar farms. It required the parent company to become a guarantor of the securities and executives to persuade banks and insurance companies that “cash flows generated by solar farms in the long run can help repay,” said the unit’s managing director Li Zhong.