UPDATE 1-Suntech,Trina Solar sign $11.7 bln loan deals

* Solar firms to tap loans for domestic, overseas expansion

* Loan agreement part of strategic partnership with CDB
(Adds background)

By Sui-Lee Wee and Leonora Walet

HONG KONG, April 14 (BestGrowthStock) – China’s top solar power
equipment makers Suntech Power Holdings (STP.N: ) and Trina Solar
(TSL.N: ) have signed framework agreements with China Development
Bank (CDB) [CHDB.UL], giving them access to a combined 80 billion
yuan ($11.72 billion) in loans, company officials said.

Suntech, China’s largest solar cell and panel maker, signed
an agreement with CDB for up to 50 billion yuan ($7.33 billion)
worth of loans over five years, Rory Macpherson, Suntech’s
director for investor relations, told Reuters on Wednesday.

“It’s a non-binding agreement,” he said. “It’s not related to
specific projects … it could be used for capacity expansion. It
essentially shows the strong partnership between Suntech and
China Development Bank,” he said, adding that the agreement was
signed in the past two weeks.

Trina Solar forged a 30 billion yuan ($4.40 billion) loan
agreement with CDB that will last through 2015, Chief Financial
Officer Terry Wang said.

While global peers have limited access to cheap state loans,
Chinese renewable energy companies are getting a boost from
Beijing as they win clean technology projects around the world
[ID:nHKG361180]. Much of that is via loans from big state banks.

Such deals are unfolding as China aggressively develops its
renewable energy sector and as its companies play catch-up with
bigger global peers including German solar cell producer Q-Cells
AG (QCEG.DE: ) and Spanish wind farm operator Iberdrola (IBE.MC: ),
which have built up solid track records, also with help from more
than a decade of government subsidies.

“As we accelerate global reach to Europe and the U.S. and as
we widen our base among top markets, we could use the loan for
market expansion,” said Wang. “We’re looking at projects
overseas.”

He said Trina Solar hoped to boost its share of the solar
products market to 9 percent this year, up from 6.2 percent last
year, adding, “Next year, we’re aiming for a double-digit
expansion.”

CAPACITY EXPANSION

Suntech is expanding capacity and lifting sales in the U.S.
market, which some analysts say could double in size this year.
The company aims to boost its share of the U.S. market to 20
percent in 2010, from about 15 percent last year.

The solar industry is rebounding from a difficult 2009, when
solar panel prices fell and the financial crisis choked off
funding for new projects.

Chinese players and Canadian Solar Inc (CSIQ.O: ) have seized
on rising demand, turning their low-cost structures into sales,
and several are planning to lift production capacity in 2010. But
financing remains a sticking point for many projects.
[ID:nN17183988]

Suntech aims to ship more than 1.25 gigawatts of photovoltaic
products this year, a jump of nearly 80 percent from 704
megawatts in 2009, as it raises production capacity to 1.4 GW by
the middle of the year. [ID:nSGE6230H3]

Increasing global demand has prompted Trina Solar to increase
its production capacity of cells and modules from 600 MW by the
end of 2009 to between 850 MW and 950 MW by the end of 2010.
[ID:nN19165613]

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UPDATE 1-Suntech,Trina Solar sign $11.7 bln loan deals