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ReneSola Gets $24M Debt Financing for Polish Solar Projects

Zacks Equity Research
Updated

ReneSola Ltd. SOL recently secured an additional senior debt facility of approximately $24.3 million (21 million Euros) from Sequoia Economic Infrastructure Income Fund, a subsidiary of Sequoia IDF Asset Holdings S.A. The financing was provided for the construction of ReneSola’s 55 megawatts (MW) of solar projects in Poland.

Details of the Project

The recent senior debt financing was an extension of the previous financing made by Sequoia in the company for the same project. Earlier, in December 2017, Sequoia provided a senior loan facility of $17.4 million (15 million Euros) for all of ReneSola's 55MW solar projects, based in Poland.

The projects are planned to get completed in three phases. Construction work on the first part of the project, with capacity of 14MW, is currently underway. This part is expected to commence commercial operation by the end of the second quarter of 2018.

Two more phases of the project, with remaining capacity of 41MW, are expected to get constructed in the second half of 2018 and connected to the grid by late 2018.

Solar Market in Poland

Poland reached a cumulative installed solar PV capacity of 281.4 MW toward the end of December 2017, according to a report published by Polish Solar Energy Association. Notably, the company installed solar power in Poland reached around 81 MW by the end of 2017.

According to a report published by PV Poland, the country's PV market is currently underdeveloped, but by 2020up to 1GW of solar power is expected to come online. Therefore, there lies a great scope for expansion in this country for solar providers like ReneSola.

Moreover, the Polish Government expects to accomplish the aforementioned target by implementing a series of auction programs. So there lies a chance for solar players like ReneSola to win such auctions, which in turn will boost their revenue growth.

Our View

Apart from the company's upcoming projects in Poland, ReneSola also has a considerably active presence in some of the European nations. In Hungary, it has a total pipeline of 38.4 MW, whereas, in Spain, its early-stage pipeline totals to 162 MW.

Furthermore, in addition to being awarded 16 solar projects totaling 4.65 MW in France, ReneSola has plans of developing four parks in Southern France, totaling 69 MW, in partnership with Germany-based Green City Energy. Therefore, in addition to its existing dominance in the domestic front, there lies immense scope for ReneSola to expand its operations in Europe, on account of the aforementioned developments.

Price Movement

ReneSola’s stock has lost 2.4% in a year compared with the industry’s growth of 33.1%. The underperformance may have been caused by the stiff competition in the solar market.



Zacks Rank & Key Picks    

ReneSola currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the same space are SolarEdge Technologies, Inc. SEDG, Canadian Solar Inc. CSIQ and Hanwha Q CELLS Co., Ltd. HQCL.

While SolarEdge Technologies sports a Zacks Rank #1 (Strong Buy), Canadian Solar and Hanwha Q CELLS carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

SolarEdge Technologies Holdings delivered an average positive earnings surprise of 29.11% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 7.5% to $3.31 in the last 90 days.

Canadian Solar came up with an average positive earnings surprise of 29.35% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 27.1% to $1.97 in the last 90 days.

Hanwha Q CELLS delivered an average positive earnings surprise of 132.86% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 154.5% to 56 cents in the last 90 days.

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Renesola Ltd. (SOL) : Free Stock Analysis Report
 
SolarEdge Technologies, Inc. (SEDG) : Free Stock Analysis Report
 
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
 
Hanwha Q CELLS Co., Ltd. (HQCL) : Free Stock Analysis Report
 
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