Not funds, but eligible green projects are the key

While there is enthusiasm from private equity funds, venture capital and even individuals to invest in China's new energy sector, there are not enough qualified projects, Bruce Lee, general manager of the China Clean Energy Network, told chinadaily.com.cn on Wednesday.

Many companies in this sector are small and family-based; these characteristics may hinder them from expanding, Lee said.

What attracts investors most is the profitability of the company, their management team and their ability to scale up, said Peter Du Pont, who leads the Private Financing Advisory Network (CTI PFAN) in Asia.

"Entrepreneurs' ability to talk to investors is also important, so we will coach them to speak the investors' language," said Du Pont, Chief of Party, ECO-Asia Clean Development and Climate Program.

The CTI PFAN, managed in Asia by USAID ECO-Asia Clean Development and Climate Program (Eco-Asia), is a multilateral, public-private partnership that nurtures clean energy projects by bridging the gap between investors and businesses.

CTI PFAN has mentored 22 Chinese clean energy companies since it was set up in the middle of last year and five of these companies have gained funds of $14 million, said Nick Keyes, senior communication strategist of Eco-Asia Clean Development and Climate Program.

The CTI PFAN Asia organizes a number of Clean Energy Financing Forums in the region on a regular basis, with one just held from Sept 7 to Sept 9.

In the Wednesday forum, 12 Chinese companies, specializing in biomass power, solar power, wind power and other clean energy areas, presented their business proposals to investors.

"We are not only searching for funds, we are searching for investors who will help us avoid detours on our way to the ChiNext ," said Xiang Zhangxian, vice-general manager of the Zhejiang Senergy Solar Technology Co Ltd, one of these 12 companies. The ChiNext Board, which started trading on Oct 30, 2009, is a Nasdaq-style growth enterprises board, and mainly lists high-tech companies and those with high growth potential.

This Zhejiang company was established in 2006 and plans to set up a new company in Jiangsu to manufacture products that can use its newly-patented PV roof tile technology, said Huang He, general manager of the company. "The first round of investment will be 70 million yuan ($10.34 million), and we want to raise 20 million yuan since we already got 50 million yuan on our own.

"When I worked in Germany, I heard people complaining about inconvenience of solar modules because they cannot exactly match the roof's color,shape and size, I began to develop th PV roof tile." said Huang He. "There is just too much work to do now, so we want a partner."

"I am interested in all the projects of the 12 companies, but we need more time to decide whether to invest in one on not," said Zhang Lihui, partner of the Qing Capital, a cleantech venture capital management firm in China.