- Source: GOLDWIND
The capital- and technology-intensive wind power industry requires large amounts of capital investment, a short construction period, and long-term financing. How to promote the steady development of the wind power industry with strong and sound financial support is a question that demands an answer from every industry stakeholder.
In March 2018, Goldwind was awarded with the Tao Zhu Gong Award, known as the “Oscar Award” designed to recognize treasury management, for its self-developed dynamic cash flow monitoring model.
As a long time world leading wind power solutions provider in the wind power industry, how did Goldwind win the “Oscar Award” for excellent treasury management?
In recent years, Goldwind has adopted a symbiotic industrial-finance development strategy and the "the industry determines financial needs, financing promotes the industry, and the integration of the industry and financing serve the main business" guidelines. By using effective capital management to activate idle capital resources, using an industrial fund to expand the scope of value-added services, using Internet+ to provide an efficient experience, and simulating financial companies in optimizing resource allocation, Goldwind has achieved mutual cooperative development between their main wind turbine business and financial services.
Establishment of an Intensive Capital Management System
With regard to capital management, Goldwind has exercised intensive capital management by taking part in the cash pooling of RMB and foreign currencies both at home and abroad, as well as monitors account balances and changes in real-time via the cross-bank capital management system. Through the cross-border cash pooling of RMB and foreign currencies, Goldwind ensures the capital demand of oversea investments. At the same time, this two-way cash pooling has enabled the company to obtain high-yield deposits overseas.
In addition, according to developmental needs, Goldwind centralizes capital allocation and manages cash flow amount, storage amount, and incremental amount. By compensating internal capital movement, Goldwind optimizes capital resource allocation, activates internal idle capital and precipitation funds, and lowers the external financing amount.
Continuous Expansion of Financing Channels
Currently, Goldwind has been pushing forward financial innovations in many areas including traditional settlement and financing businesses, the financing of Chinese and overseas wind power projects, supply chain financing services, and industrial funds.
A strategic partnership in terms of mutual benefits and mutual trust is the common pursuit of industrial enterprises and financing institutions. In terms of cooperating with banking institutions, Goldwind has established strategic partnerships with many banks, creating the highest level banking-enterprise cooperation. Goldwind’s major banking partners include the China Development Bank, The Export-Import Bank of China, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, China Construction Bank, and other major Chinese shareholder banks and foreign banks such as the Hong Kong and Shanghai Banking Corporation, Citibank, and BNP Paribas.
In addition to banking institutions, Goldwind has also closely cooperated with other financial institutions such as trust companies, security companies, and financing and leasing companies to provide private wind farms with equipment, EPC general contracting, O&M, and financing solutions.
With respect to direct financing, Goldwind has integrated green finance and the industry to make itself the “practitioner” and promoter of the green finance concept. Through green finance innovations, Goldwind aims to direct social capital to invest in the clean energy industry. In July 2015, Goldwind successfully issued the first labeled green bond from a Chinese company, in May 2016, China’s first green perpetual bond, and in August 2016 the country’s first green assets backed security (ABS).
These efforts have been widely recognized by society. Goldwind is the only Chinese company to win The Asset’s Best Asset Securitization Award and the Best Green Bond in the Asian Region.
Goldwind has continuously held stable ratings from various banks and credit rating institutions. Goldwind is rated AAA by CCXI and BBB-/Baa3 by Standard & Poor’s and Moody’s, gaining popularity among banks and investors.
↑ABC Huiying· Goldwind Green ABS backed by wind power fee and yield officially listed
Accumulation of Credit from the Wind Power Supply Chain
As a leading player in the wind power industry, Goldwind has always focused on the optimization and upgrading of the whole industrial chain and made unremitting efforts to establish a healthier industrial ecological environment and financing environment. With respect to supply chain finance, Goldwind has never stopped striving forward. Since the beginning, Goldwind has been working to establish an information sharing platform, which will direct financial institutions and social capital to support wind power and other renewable energies, energy conservation and environmental protection endeavors, and helping companies to expand financing channels, accelerate capital turnover, and significantly lower capital cost and financial cost. Currently, the company’s supply chain finance service mainly offers financing solutions for supply chain companies, including orders/warehousing entry financing, receivables transfer, and network bank factoring.
In the future, Goldwind will continue to establish a reliable and transparent supply chain financing information service platform, integrate quality industry resources, and accumulate supply chain credits to meet diversified financing demands.
↑Scope of Goldwind Supply Chain Finance
Improvement of Overall Risk Management
In regard to the risk control of capital operation, Goldwind introduces risk control experiences from financial institutions to improve whole process risk management. The risk management team improves regulations and standards, optimizes process management, and strengthens the internal control system. They effectively improve the centralized management and control of operational risks, liquidity risks, rates risks, exchange rate risks, and maturity mismatch risks. Through these efforts, the company ensures consistent standards and processes in the risk control system and prevents flaws of decentralized management models such as inefficient risk identification and response. The principle of “identifying problems, analyzing risks, and responding to information in a timely manner” is adopted to realize the high-level integration between risk management and operational management. For example, a risk warning letter will be instantly issued when problems are identified during daily observations. In addition, Goldwind has strengthened the risk management of foreign currencies, advising on capital risks for overseas investments, reviewing risk exposures, and designing hedge products.
Active Pursuit of Digital Innovation
With regard to financial digitalization innovations, Goldwind has drawn on advantages in both finance + wind power industries and developed the “Wind · Cloud” sharing platform which aims to increase transparency and lower cognition barriers. Drawing from existing big data resources accumulated in the wind power industry, from the perspectives of equipment suppliers, EPC contractors, property owners, creditor investors, and other stakeholders, Goldwind designed digitalized models for wind power projects, which cover all the related processes from economic evaluation, plan engineering, construction management, O&M, and management after loan to project evaluation and monitoring.
The platform is successfully online, providing fundamental sharing services for the industry, lowering entry barriers, and pushing forward industry development. At the same time, by providing information access, it enables clients and stakeholders to gain information and maintain bilateral relations.
Increasing Capital Efficiency
In April 2018, the financial arm of Goldwind was approved to establish a company by the Insurance Supervision and Management Committee of the Bank of China. With this establishment, the financial company will fully leverage its settlement function to reduce cash in transit and effectively increase capital usage efficiency. Goldwind will take full advantage of its financial functions to plan and coordinate financial resources, optimize resource allocation structures, and strengthen centralized capital management. It will achieve the highest economic value while serving the company’s strategic development. The financial company will provide various facilitating services to its member units such as loan application, providing collateral, bill discounting, and entrust loans. Goldwind aims to promote mutual cooperative and symbolic development of wind farm owners and financial services, and the mutual development of the real economy and the financial industry, which is exactly the main idea of supply-side structural reform.
Goldwind’s chairman Wu Gang emphasized on several occasions that, in the future, global energy transformation would depend on the all-around usage and development of renewable energies. He also emphasized that in order to realize this goal, we have to rely on technological, financial, and industrial innovations.
Winning the Tao Zhu Gong Award is just the beginning of our adventure. From technological innovation to financial and industrial innovation, Goldwind has been rapidly advancing in industrial-finance integration and the main business of wind power, pushing forward industry development and embracing an era of digitalized wind power.