Zhonghuan Holding announced on July 18 that it has signed a framework agreement with Jiangsu Zhongqing Photovoltaic Technology and the government of Fengtai County for the joint development of an industrial base. The base will be located in Fengtai County, which is a part of the prefecture-level city of Huainan in China’s Jiangsu Province. The announcement was first picked up by Chinese news outlets and other renewable energy news websites.
Under the agreement, the parties will build an industrial base with a production capacity of 10GW per year for N-type cells and a production capacity of 10GW per year for advanced PV modules. The total investment in the base is estimated to reach RMB 6.8 billion (including circulating capital). Spanning an area of 800-1,200 mu, the base will be developed in three phases. The first phase, which will entail an investment of RMB 1.5 billion (including circulating capital) and cover an area of 400-500 mu, will add 2GW for modules and 2GW for cells. The second phase, which will entail an investment of RMB 1.5 billion and cover an area of 400-500 mu, will add 3GW for cells. The third phase, which will entail an investment of RMB 3.8 billion and cover an area of 600-800 mu, will add 5GW for cells and 8GW for modules. The construction of facility buildings for the first phase and the second phase will take place simultaneously. However, the equipment move-in will occur in order.
According to the latest development schedule, the first two phases will begin in 2022 and finish in 2023. As for the duration of the setup of the entire base, it is expected to be within 24 months. After becoming operational, the first phase and the second phase are projected to generate around RMB 4 billion and 8 billion respectively in annual revenue. The hope is that with the industrial base, a local supply chain for PV products will also be established.
Additionally, Zhonghuan and Zhongqing will be forming a joint venture based in Hong Kong as an external investor of the Fengtai base. The joint venture will then create two subsidiaries. One will be focusing on cell manufacturing, while the other will be focusing on module manufacturing.
As for the county government, it is obligated under the framework agreement to provide an adequate amount of land for the industrial base. It will also provide various incentives, streamline the permitting process, and coordinate its various agencies to facilitate the loans for circulating capital. All in all, the government will create a positive environment for Zhonghuan and Zhongqing so that they can progress as scheduled with respect to investment, construction, and production.