China’s Yingli Solar Gears Up for $5B Expansion

Photo courtesy of Jeremy Levine Design's photostreamIf Yingli Green Energy Holding Co. (s YGE) is already a giant in the solar cell industry, it’s now seeking a more than $5 billion credit line to become one heavy beast. Yingli is in negotiations to borrow up to RMB36 billion, or about $5.31 billion, from the China Development Bank in order to “pursue opportunities that will allow us to strengthen our leadership position,” in the photovoltaic industry, the company announced on Friday.

Yingli Green Energy has more than 10 subsidiaries running the gamut from production of polysilicon used in solar cells through to assembly of solar modules. The company said today that the funds under this new agreement would go primarily toward the subsidiaries Tianwei Yingli, Yingli China and Fine Silicon for investments in their photovoltaics business in China and overseas.

The most visible illustration this month of Yingli’s ongoing push to expand its reach globally has been its sponsorship of the World Cup, where it has by some estimates invested upwards of $20 million to have the Yingli Solar logo plastered around the fields alongside big global brands like Budweiser and McDonald’s. (If you saw Landon Donovan’s goal against Slovenia, Yingli’s logo was right there in the background.)

Back in April, Yingli said it had completed around 75 percent of the trials needed for producing polysilicon at its Fine Silicon facility in Baoding, China. At the time the company hoped to launch fully integrated production by the middle of this year (i.e. around now or within the next couple months) but had “no near-future plans” to expand the production capacity at the plant beyond 3,000 metric tons per year. Today Yingli said the Fine Silicon plant is now “at the final stage of the segment trial process,” and it’s still targeting that mid-2010 kick-off. Yesterday Yingli said it had completed a 400-megawatt expansion of production capacity at two of its facilities.

Yingli’s plans for investments in photovoltaics comes during a period of consolidation in the solar industry. Pike Research (a GigaOM Pro partner) forecast “gross oversupply” of solar modules in a May 2010 report, noting that there are “190 cell and module manufacturers, making consolidation of weaker competitors an inevitable outcome.”

Image courtesy of Jeremy Levine Design’s photostream

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