Chinese Solar Firms, Saudi Entities to Invest $3 Billion in Production Tie-Ups

Dow Jones07-17

By Jiahui Huang

Two Chinese solar-panel manufacturers will tie up with Saudi Arabian companies to set up production facilities in the Middle East nation, with total investment planned at about $3 billion.

Solar-module maker TCL Zhonghuan Renewable Energy Technology said late Tuesday that it would form a joint venture with a unit of Saudi sovereign wealth fund Public Investment Fund, and Vision Industries, a Riyadh-based company focused on renewable energy, to develop a silicon-wafers manufacturing facility with a total investment of about $2.08 billion.

TCL will take a 40% stake in the JV, with PIF unit Renewable Energy Localization Co. having a 40% share and Vision Industries the remainder, TCL said in a filing to the Shenzhen stock exchange.

Chinese solar-module giant Jinko Solar said separately that it would form a JV with the same Saudi entities to set up a facility to produce solar cells and solar modules with a total investment of 3.69 billion Saudi Arabian riyals ($983.8 million). Jinko said it would take a 40% stake in the venture, while RELC and Vision Industries will hold 40% and 20%, respectively.

Jinko Solar shares were 3.8% higher at 7.64 Chinese yuan ($1.07) at midday on Wednesday, while TCL was up 3.6%.

The deal comes as Chinese solar-module makers are facing challenges of high inventory and excessive capacity alongside concerns over fresh tariffs on U.S. imports of solar modules.

The U.S. Department of Commerce in May launched an antidumping probe into imports of silicon photovoltaic cells from Cambodia, Malaysia, Thailand and Vietnam, countries where Chinese solar companies have large manufacturing facilities.

The Middle East has become a darling of many Chinese alternative-energy companies seeking to boost sales and ease domestic overcapacity pressure. Saudi Arabia has emerged as an important player amid its drive to localize production of solar panels and develop renewable energy. China's exports of solar modules to the Middle East rose 27% in 2023 and Saudi Arabia remains the top three importers of Chinese solar modules in May, according to solar-focused research firm InfoLink Consulting.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

July 17, 2024 01:52 ET (05:52 GMT)

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Chinese Solar Firms, Saudi Entities to Invest $3 Billion in Production Tie-Ups

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