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Green Covered Bonds to Fund Chinese Solar Power Plants

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NordSIP (Stockholm) – On Thursday, January 31, Advanced SolTech Sweden AB (publ) ”ASAB” issued a SEK 170 million green covered senior secured corporate bond under its SOLT5 program. ASAB is 51% owned by SolTech Energy Sweden AB (publ) and 49% owned by Advanced Solar Power (Hong Kong) Ltd. ASAB finances solar power plants in China that are installed, owned and continuously maintained by the SolTech Group’s Chinese joint venture, Advanced SolTech Renewable Energy Hangzhou Co. Ltd, “ASRE”.

This issue is the first in ASAB’s green bond framework of up to SEK 1,500 million. The security matures on 25 January 2023 and pays a floating rate of 900bps above the 3-month Stibor. Jool Markets was the sole Manager and Bookrunner for the bond issue. DNB Sverige was the financial advisor.

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“The bonds are intended to be listed on First North Sustainable Bond Market, and the net proceeds are allocated to finance the acquisition of an existing solar energy portfolio of 24.44 MW, consisting of 17 roof-based solar power plants in China which annually generate about 19% return on invested capital. After the acquisition, the total portfolio will amount to 92.82 MW and generate annual revenues of approximately SEK 124.5 million with a good profit margin”, according to a press release by SolTech Energy.

“After three successful green bond issues in 2018, aimed at private individuals, with SOLT5, we have made an entry into the important market of institutional bonds. Here there is considerably more capital available, which bodes well for the future as we have about 25 MW in the order book, about 5 MW under construction and a project pipeline of over 100 MW that we process continuously,” says Frederic Telander.

“Completing our first green bond issue represents a significant milestone for JOOL. Green bonds are growing rapidly as a source of funding within a large and expanding number of industries. Our existing focus and expertise within the bond markets, in combination with our partnership to the Climate Bonds Initiative, allows us to play a leading role in providing small and midsized Nordic issuers with access to the green bond market going forward,” according to Tom Olander, co-founder of the JOOL Group.

The last time that ASAB was in the market was in October 2018, when it issued SEK 70 million worth of 2023 SOLT4 bonds that pay an 8.25 % coupon to 1,290 investors.

Picture from Pixabay

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