Offering of the First Clean Energy Holding-type Real Estate ABS and SSE's Establishment of a Multi-level REIT Market for Promoting Green Finance

Translated from Shanghai Securities News, He Xinyi

On June 17, the "Taikang Asset Management-Caitong-Yuanjing New Energy Holding-type Real Estate Asset Support Special Program (Carbon Neutrality)" (Yuanjing Energy ABS) was successfully issued and established on SSE. As the market's first clean energy holding-type real estate ABS, the project has an issuance scale of 285 million yuan and adopts a flat structure design with a term of about 50 years. The underlying asset is Hengpeng Wind Farm in Wei County, Handan, Hebei, and its income sources include wind power grid-connected electricity fees and green environmental rights. Its implementation marks a key breakthrough in wind power asset securitization and provides an innovative financial solution for the green transformation of enterprises.

High-quality wind power projects build an asset listing platform and broaden financing channels based on a diversified product system

The project initiator, Yuanjing Energy, is a leading green technology enterprise. As of 2024, its cumulative installed capacity of wind turbines had exceeded 80 GW. In 2024, it ranked first and second globally in terms of order volume and installed capacity respectively. Its overseas orders have accounted for 60% of overseas orders of Chinese wind turbine enterprises for three consecutive years. This issuance improves the efficiency of corporate capital use by achieving the stable cash flow of wind power projects in the future. Hengpeng Wind Farm in Wei County has attracted the attention of many investors due to its advantages such as low wind curtailment rate, high power generation hours, and stable on-grid electricity prices. Besides, the project has creatively developed a continuous expansion mechanism, planning to become a listing platform that can continually incorporate clean energy assets.

Clean energy supports national carbon reduction goals and innovative tools facilitate social green transformation

As a standardized "carbon neutrality service tool", the project can encourage first-tier to fourth-tier suppliers of core enterprises to participate in green electricity investment and promote decarbonization throughout the value chain. Hengpeng Wind Farm in Wei County has an installed capacity of 100 MW and is expected to sell 230 million kWh of green electricity annually. It has been calculated that compared with traditional thermal power, this project can reduce carbon dioxide emissions by 179,800 tons per year, replace fossil energy equivalent to 69,800 tons of standard coal, and reduce pollutants such as sulfur dioxide, nitrogen oxides, and fume. The project has creatively incorporated green electricity certificates, enhancing the economic value of clean energy and paving a new financial avenue for green economic development.

Multiple parties cooperate for win-win results and diversified investors promote sound market ecosystem development

Yuanjing Energy ABS has received support from multiple types of investors such as insurance funds, banks' wealth management companies, securities asset management institutions, and public fund special accounts. Taikang Asset Management has pointed out that holding-type ABS provides a new investment path for industrial and financial investors through standardized and share-based design. In the future, it can promote the securitization of more high-quality wind power assets and establish a standard trading mechanism for green assets. According to CIB Wealth Management, purchasing this product can increase the bottom warehouse returns of wealth management and diversify risks. Diversified capital intervention has not only injected diversified funds into the new energy industry but also enhanced the liquidity and valuation efficiency of underlying assets through transaction structure innovation, marking that China's green finance has shifted from being policy-driven to ecosystem evolution.

SSE establishes a multi-level clean energy REIT market to facilitate the development of green finance

To date, SSE has developed a diversified product matrix of "publicly traded REITs, holding-type real estate ABS, and green bonds", which can match the financing needs of clean energy assets at various stages. Data shows that SSE has listed 5 clean energy REITs with an issuance scale of 14.29 billion yuan. Regarding holding-type real estate ABS, in addition to Yuanjing Energy ABS, TrinaPower's photovoltaic project has also been applied for. Since the launch of the first holding-type real estate ABS in 2023, SSE has promoted the application for 21 projects (with a planned issuance scale of 34.4 billion yuan) and successfully issued 7 projects (with a scale of 12.5 billion yuan), covering commercial properties, energy infrastructure, and other fields and realizing coordinated development with publicly traded REITs. Moving forward, SSE will focus on the development of central SOEs and the asset revitalization of local state-owned enterprises to foster more green projects that can be invested in and enjoy great investment appeal to facilitate the implementation of "dual carbon" goals and the "five major areas" of central finance.

The above information is provided for reference purposes only and does not constitute investment advice.