Bloomberg News | August 23, 2021
Image: Joseph Brent | Flickr Commons.
Chinese investors see potential for further gains in companies making equipment needed to produce or use green hydrogen, a clean energy source most governments are betting will help them meet mid-century climate targets.
The sector has so far offered a haven from government crackdowns on technology and education companies that Beijing blames for exacerbating inequality and increasing financial risk. As China tightens oversight, industries driving growth through innovation and technology are seen gaining support.
“Hydrogen power is one of the ultimate solutions to achieve net-zero emissions,” said Li Weiqing, fund manager at JH Investment Management, which purchased shares of LONGi Green Energy Technology Co. due to the company’s hydrogen investments. The sector will get “heavy policy support.”
Although a surge in hydrogen-related stocks earlier this month that buoyed shares of companies like fueling-station equipment maker Houpu Clean Energy Co. and fuel cell engine maker Zhongshan Broad Ocean Motor Co. has leveled off, there remains plenty of upside potential, according to Li.
Government support for green hydrogen isn’t likely to come through direct central government subsidies, according to Xiaoting Wang, a BloombergNEF analyst based in San Francisco, who cited the high cost of that approach. Rather, Beijing will support large state-backed firms developing the energy.
However, the sector is benefiting as local governments, including Beijing and Inner Mongolia, introduce strategies aimed at cultivating green hydrogen firms to show compliance with net-zero targets. China will account for about two-thirds of the world’s electrolyzers, the equipment used to produce hydrogen by separating water, by the end of 2022, according to BNEF.
More than 20 provinces and 40 cities in China have published development plans worth trillions of yuan for hydrogen energy facilities, according to the state-run Economic Daily. The country delivered 558 fuel-cell buses in the first six months of 2021, compared with 17,000 battery electric buses deployed in the second quarter of this year alone, according to BNEF.
(With assistance from Jeff Sutherland)
China Muscles In on Middle East Renewables With Alcazar Deal
Nicolas Parasie
Mon, August 23, 2021,
(Bloomberg) --
China is making one of its biggest pushes yet into Middle Eastern renewable energy.
A group led by state power firm China Three Gorges Corp. is buying Alcazar Energy Partners, a Dubai-based wind and solar developer. The announcement on Monday confirmed a Bloomberg News report last week.
While financial details weren’t disclosed, Bloomberg reported earlier that a deal could value Alcazar at about $1 billion, including debt.
“The region has really high growth prospects,” Daniel Calderon, Alcazar’s co-founder and chief executive officer, said in an interview with Bloomberg Television. Alcazar and its backers saw a large number of bidders and selected a “blue-chip investor” with a strategy to grow the portfolio in the region.
The deal could serve as a springboard for China to increase clean energy investments in the Middle East. Chinese companies have put their money into oil and gas in the likes of Iraq and the United Arab Emirates for years, but have rarely invested in renewables.
Previous Chinese investments include JinkoSolar Holding Co. and Jinko Power Technology Co., two affiliated solar-panel makers, taking minority stakes in solar projects in the UAE.
Power Grids
Several Middle Eastern governments, including the major oil producers in the Persian Gulf, are trying to cut the use of fossil fuels in their power grids. China Three Gorges South Asia Investment Ltd., or CSAIL, the unit leading the Alcazar transaction, said the region could attract $175 billion of clean-energy investments in the next decade.
Founded in 2014, Alcazar has projects in Egypt and Jordan with a total generation capacity of around 410 megawatts. Its investors include a fund linked to Abu Dhabi’s Mubadala Investment Co., Dubai-based BluStone Management Ltd. and the World Bank’s International Finance Corp.
Alcazar’s projects have helped power 275,000 households and saved over 15.6 million tons of carbon dioxide, according to Calderon. He was previously an executive at Masdar, an Abu Dhabi-based renewable energy firm owned by Mubadala, and General Electric.
CSAIL is an overseas investment company controlled by China Three Gorges. Its aim is to acquire and develop renewable power assets, primarily in Asia. The IFC and Chinese sovereign wealth fund Silk Road are minority shareholders.
China Three Gorges listed its renewable energy subsidiary earlier this year in Shanghai, raising $3.6 billion. It has been acquiring foreign assets for more than a decade. Since early 2020, it’s invested roughly 1 billion euros ($1.2 billion) in Spanish solar projects.
Standard Chartered Plc advised Alcazar on the deal. They began a strategic review last year, with the process taking longer than expected due to the coronavirus pandemic.
CSAIL was advised by Natixis and its affiliates by Vermilion Partners and EFG Hermes. Freshfields Bruckhaus Deringer provided legal advice to Alcazar
©2021 Bloomberg L.P.
Nicolas Parasie
Mon, August 23, 2021,
(Bloomberg) --
China is making one of its biggest pushes yet into Middle Eastern renewable energy.
A group led by state power firm China Three Gorges Corp. is buying Alcazar Energy Partners, a Dubai-based wind and solar developer. The announcement on Monday confirmed a Bloomberg News report last week.
While financial details weren’t disclosed, Bloomberg reported earlier that a deal could value Alcazar at about $1 billion, including debt.
“The region has really high growth prospects,” Daniel Calderon, Alcazar’s co-founder and chief executive officer, said in an interview with Bloomberg Television. Alcazar and its backers saw a large number of bidders and selected a “blue-chip investor” with a strategy to grow the portfolio in the region.
The deal could serve as a springboard for China to increase clean energy investments in the Middle East. Chinese companies have put their money into oil and gas in the likes of Iraq and the United Arab Emirates for years, but have rarely invested in renewables.
Previous Chinese investments include JinkoSolar Holding Co. and Jinko Power Technology Co., two affiliated solar-panel makers, taking minority stakes in solar projects in the UAE.
Power Grids
Several Middle Eastern governments, including the major oil producers in the Persian Gulf, are trying to cut the use of fossil fuels in their power grids. China Three Gorges South Asia Investment Ltd., or CSAIL, the unit leading the Alcazar transaction, said the region could attract $175 billion of clean-energy investments in the next decade.
Founded in 2014, Alcazar has projects in Egypt and Jordan with a total generation capacity of around 410 megawatts. Its investors include a fund linked to Abu Dhabi’s Mubadala Investment Co., Dubai-based BluStone Management Ltd. and the World Bank’s International Finance Corp.
Alcazar’s projects have helped power 275,000 households and saved over 15.6 million tons of carbon dioxide, according to Calderon. He was previously an executive at Masdar, an Abu Dhabi-based renewable energy firm owned by Mubadala, and General Electric.
CSAIL is an overseas investment company controlled by China Three Gorges. Its aim is to acquire and develop renewable power assets, primarily in Asia. The IFC and Chinese sovereign wealth fund Silk Road are minority shareholders.
China Three Gorges listed its renewable energy subsidiary earlier this year in Shanghai, raising $3.6 billion. It has been acquiring foreign assets for more than a decade. Since early 2020, it’s invested roughly 1 billion euros ($1.2 billion) in Spanish solar projects.
Standard Chartered Plc advised Alcazar on the deal. They began a strategic review last year, with the process taking longer than expected due to the coronavirus pandemic.
CSAIL was advised by Natixis and its affiliates by Vermilion Partners and EFG Hermes. Freshfields Bruckhaus Deringer provided legal advice to Alcazar
©2021 Bloomberg L.P.
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