SunTech, Trina Solar sign $11.7 billion loan deals

CDB loans to Suntech and Trina Solar signal strong renewable energy financing, supporting photovoltaic capacity expansion, global market penetration in the US and Europe, and rising market share amid a solar industry rebound.

Chinas 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 US $11.72 billion in loans, company officials said.

Suntech, Chinas 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, Suntechs director for investor relations, told Reuters.

Its a nonbinding agreement, he said. Its not related to specific projects... it could be used for capacity expansion. It essentially shows, as many in the industry look beyond Wall Street for financing, 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 US $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, buoyed by a boost from climate talks across key markets as they play catchup with bigger global peers including German solar cell producer QCells 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. Were looking at projects overseas.

He said Trina Solar hoped to boost its share of the solar products market, where a handful of players are seen ruling the roost, to 9 percent this year, up from 6.2 percent last year, adding, Next year, were aiming for a doubledigit 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, supported by Suntech panels sold out through early 2010, from about 15 percent last year.

The solar industry is rebounding from a difficult 2009, when solar panel prices fell and the solar credit crunch choked off funding for new projects.

Chinese players and Canadian Solar Inc, which is targeting an output boost this year, have seized on rising demand, turning their lowcost 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, as solar execs see signs of recovery across key markets, 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.

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