JinkoSolar Holding Co., Ltd. (JKS) announced the completion of a private equity investment, worth $225 million, for its downstream solar power project business. Initially announced on Jul 30, 2014, the transaction was executed through share purchase agreements.
JinkoSolar Holding’s subsidiary, JinkoSolar Power Engineering Group Ltd., has inked three separate definitive share purchase agreements with each China Development Bank International; the Macquarie Greater China Infrastructure Fund, managed by Macquarie Infrastructure and Real Assets; and New Horizon Capital. Per the agreements, the firms have invested a total of $225 million in JinkoSolar Power and collectively hold an equity interest of around 45% in the company.
This transaction aims to offer additional resources and assistance for the spin-off and listing of JinkoSolar Power. It also aims to enhance JinkoSolar’s downstream business by providing financial, construction and operational services.
JinkoSolar’s steady efforts toward expanding its Chinese solar operations are in line with its business strategy. The company pursues several strategies to ensure a stable financial source for its domestic projects. In Jul 2014, JinkoSolar inked a five-year RMB1 billion strategic financing agreement with China Minsheng Banking Corp., Ltd.
The National Energy Administration of China has recently told the local administrations to focus on distributed generation, reform and emphasize feed in tariffs, and offer additional financial incentives and fast-track connections. These schemes are a step toward China’s target of installing 8 gigawatts of distributed solar in 2014.
JinkoSolar is looking to tap the growing Chinese solar market. The company maintains a stable order book from the Chinese customers and a strong business alliance with the local governments.
In Oct 2014, JinkoSolar inked a photovoltaic (PV) project development agreement with the government of Shicheng County, Ganzhou City, Jiangxi Province to construct a 200-megawatt (MW) PV power plant.
Apart from JinkoSolar, its peers ReneSola Ltd. (SOL) and Trina Solar Ltd. (TSL) are expanding their respective operations in China.
JinkoSolar currently holds a Zacks Rank #4 (Sell). A better-ranked stock in the same sector is Canadian Solar Inc. (CSIQ), carrying a Zacks Rank #2 (Buy).
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