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Wind Business: Financing catalyst for US imports of Chinese wind technology - Chinese cash behind American beachhead

The first-ever Chinese capital dedicated to wind project finance in America has been arranged by a Texas company called Tang Energy. The company says the financing will act as a catalyst for Chinese-made equipment entering the US because the funds are contingent on financing wind plants that use at least 40% imported Chinese hardware.

Tang says it secured the $300 million from a subsidiary of state-owned China Aviation Industry, CATIC International Trade and Economic Development. Tang has no developed wind assets or land control in the US, says its president, Patrick Jenevein, but it intends to use the cash to acquire or partner with existing wind developments in the US.

"We're looking for good partners, says Jenevein. "If it needs financing, then great. If it needs financing and equipment, then even better. We've been investing in China for years and importing profit. If we can, we would like to expand the market for our blades."

The company plans to use a first 200 to 250 MW of wind projects in the US as a beachhead for Chinese blades made by Zhong Hang Huiteng Wind Power Equipment Co (HT Blade), in which Tang has a substantial ownership stake. The Baoding-based company started making blades in 2002 and operates four facilities turning out blades for turbines rated at 600 kW to 3 MW. Jenevein says HT Blade made about 7000 blades in 2008, almost all for the Chinese market, with only 100 or so sets for export, but it hopes to tilt its exports much higher.

Sinovel favoured

The financing could also spur US imports of Chinese-made turbines. "We'll work with Chinese manufacturers that have been customers of HT Blade. There are some good turbine manufacturers in China - not an awful lot of them and there are some that are not good - but we prefer working with the very good ones," says Jenevein. He singles out Sinovel as Tang's favoured choice. Jenevein says the "made in China" label would be more symbolic than substantive because many turbines deployed in the US already source major subcomponents from China, such as gearboxes for GE's 1.5 MW turbines, as just one example. "So we're not really stretching that far. What we really want to do is create enough demand for our blades so we can build some factories here," says Jenevein.

Tang Energy shares its Dallas, Texas, office with a new wind project development outfit called Soaring Wind Energy. The two groups share common investors and are closely aligned. Tang focuses on wind project finance and Soaring Wind on gearing up for project development in the US and accessing Chinese wind energy equipment.

Jenevein says this first round of financing could be just the beginning of a much bigger effort. "Three hundred million is a lot ... and add in another one hundred million of equity, you're still only looking at a couple hundred megawatt. We want to do a lot more than that. We're on the small end of what the capacity of our partners in China is, and we hope to increase that by doing good work in the US," he says.

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