ReneSola in £440m China project

Company well placed to gain from Beijing government’s ‘increased focus' on alternative energy

20/08/2009 Robert Tyerman

One of Renesola's multicrystalline silicon ingots

Solar power equipment specialist ReneSola has agreed to develop a $706 million (£440 million) 150-megawatt project in China’s Ningxia Hui region.

Based in Zhejiang, China, and quoted on AIM and the New York Stock Exchange, the company has signed a letter of intent with Taiyangshan Development Zone in Wuzhong City to develop the plant in Ningxia Hui, which is one of the People's Republic’s sunniest regions. ReneSola, a former AIM star earlier hit by an industry-wide over-supply problem, expects construction work on the four-year project to start next year, subject to a feasibility study and government approvals.

Chief executive Xianshou Li says the company, which now makes solar cells and modules as well as the solar wafers with which it began, is well placed to exploit opportunities provided by the Beijing government’s ‘increased focus on establishing alternative energy sources’. He adds ReneSola is ‘excited’ by China’s transformation from manufacturing hub for solar products to ‘an increasingly important end-user’.

Oversupply and an overhang of raw materials sent ReneSola into red, but its fortunes have been recovering lately. The first quarter to June showed pre-tax profits of £15 million against a £36 million loss the year before.

Floated at 79p in 2006 and recommended by Growth Company Investor at 94p in the same year, ReneSola shares hit 639p in early 2007, before plunging to 76.25p. They have now reached 175p, up 26p this morning, and should make up some more ground.