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New group advocates fund for renewable power units

(Shanghai Daily)
Updated: 2007-01-17 10:22

A new?Chinese industry group is considering a 10 billion yuan (US$1.28 billion) fund to support the development of the country's small and medium-sized renewable energy companies.

The fund aims to raise one billion yuan in the near term and 10 billion yuan later, according to Li Hejun, chairman of the China New Energy Chamber of Commerce.

The effort is designed to widen fundraising channels for small-scale companies as well as create investment opportunities for the public in renewable energy sectors such as solar, wind and biomass, the official said.

Li's comments came during a weekend news conference inBeijingthat marked the establishment of the industry group, which initially has 112 domestic private member companies, including New York-listed Suntech Power Holdings Co.

"We are also considering setting up several renewable energy bases across the country and some trading markets for renewable energy products," Li told reporters.

Establishment of the fund is only at an initial stage. The group plans to propose the plan to the government for approval by the end of this year, another official said.

Approval for the fund may take time, however, as the concept represents a relatively novel approach in China, said an analyst who declined to be named.

Bohai fund

China last month inaugurated the Bohai Industry Investment Fund to finance the development around Bohai Bay in China's north. That fund aims to raise 20 billion yuan from state and private investors, becoming the first of its kind in China.

The nation plans to spend 1.5 trillion yuan over the 15 years through 2020 on renewable power to reduce reliance on oil and cut pollution, the government said earlier. The Ministry of Finance set up a state fund last year to subsidize the sector.

"The government, however, hasn't elaborated on how the subsidies will be used, but details will come soon," Li Junfeng, secretary-general of the Chinese Renewable Energy Industries Association, said yesterday at a news conference for an equipment and technologies exhibition called Wind PowerShanghai2007, the nation's first such event.