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Outbound investment plans approved by NDRC

(Global Times)

08:18, October 10, 2012

China's top economic planner has announced approval of 15 companies' outbound investment projects, with most of them involved in the energy sector, a move analysts said Tuesday could help resolve domestic energy shortages.

It could also alleviate the overcapacity pressure facing domestic solar energy firms, who are facing anti-dumping actions by the US and European Union.

Three solar energy enterprises gained approval to invest overseas, according to a list announced by the National Development and Reform Commission on its website Monday.

The NDRC gave the green light for Jiangsu Winsun New Energy Co to set up photovoltaic (PV) plants in Italy and Greece, without disclosing their specific installed capacities.

Hefei Hareon Solar Technology Co will build PV plants in Romania with a total installed capacity of 122 megawatts. And Zhejiang Hynergy Investment Holding Co will buy projects from Apollo Solar Energy Technology Holdings Ltd in Hong Kong, although further details about the projects were not available.

As well as solar energy investment projects, the NDRC also approved two traditional power plant projects and one oil and gas investment program overseas.

"It is a development trend for domestic energy enterprises to head overseas, as the country is highly reliant on oil imports, and the problem of energy shortages will increase along with fast economic growth," Zhou Dadi, a professor at the Energy Research Institute under the NDRC, told the Global Times Tuesday.

Zhou said that although financial risks existed, the return rate from direct outbound investment will still be larger than from purchasing other countries' government bonds.

For the solar energy enterprises, setting up PV plants could ease their problems of domestic overcapacity to some extent, Zeng Shaojun, secretary-general of the China New Energy Chamber of Commerce, told the Global Times.

"The solar energy enterprises could transfer their PV products to the countries where they build plants, where solar power consumption is encouraged and supported by local governments," Zeng noted.

Solar power is used on a small scale in China, mainly because the costs are much higher than for more polluting energy sources. And after both the US and EU launched anti-dumping and anti-subsidies complaints against the Chinese solar power sector in recent months, domestic solar energy firms are suffering even more serious pressure from overcapacity.

The Ministry of Commerce (MOFCOM) announced in May that China's outbound investment is expected to reach a total of $150 billion in 2015, with an annual growth rate of 17 percent during the 12th Five-Year Plan period (2011-15).

But dragged down by sluggish Western economies, Chinese companies have become more cautious. China's outbound investment slowed down in 2011, seeing a rise of just 1.8 percent year-on-year.

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