United Photovoltaics Group Ltd (HKG:0686) said Friday it will sell and then lease back a 40-MW photovoltaic (PV) park under a deal with domestic finance firm China Kang Fu International Financial Leasing Co Ltd.
The current owner of the solar park, United PV's 89.78%-owned unit Guodian Tuoketuo County Solar Power Co Ltd, will receive CNY 300 million (USD 48.3m/EUR 43.4m) for the plant and certain PV equipment. Subsequently, it will start paying a bit over CNY 395.3 million in 40 quarterly instalments in cash to lease the assets back for 10 years and a further CNY 48 million for related consultancy services.
The Hong Kong-based solar firm, part of investor and power plant operator China Merchants New Energy Group (CMNE), explained it views the finance lease deal as a long-term secured loan facility with a 6.215% annual interest rate. The move will result in a “better allocation of resources”.
The solar park is located in Tuoketuo county, Inner Mongolia autonomous region. The company will be able to buy it back during the lease period by giving a three-months’ prior written notice. The transaction has already been approved by its shareholders.