Research On The Financing Mode Of REITs For Electric Power Companies Under The "Dual Carbon" Goal

The proposal of "carbon peak" and "carbon neutrality" targets is a major strategic deployment made by the CPC Central Committee and the State Council based on the concept of a community with a shared future for mankind,which puts forward two time points for China’s energy transformation.Energy transformation and infrastructure construction are key factors,and increasing financing is crucial.As one of the main sectors responsible for carbon emissions in China,the power industry plays a crucial role in promoting the implementation of the"dual-carbon" goals and bears the responsibility of transforming the energy system and energy structure.However,at present,power companies are facing a dilemma in financing,as they want to expand their financing scale through debt issuance for new projects,but are limited by their high asset-liability ratio.Under this dilemma,the power industry urgently needs to find a new financing model that can break through the current situation.Meanwhile,the pilot and promotion of infrastructure public REITs is like a "timely rain",bringing a turning point to the power industry that has long suffered from financing difficulties in low-carbon transformation.Penghua Shenzhen Energy REIT,initiated by Shenzhen Energy Group and established and issued by Penghua Fund,is China’s first public REIT for clean energy power infrastructure.Its issuance marks the official connection of China’s low-cost market-oriented capital to participate in power infrastructure projects,opening up a new financing model for China’s power companies.This paper takes Penghua Shenzhen Energy REIT as a case study to explore the motivations,methods,feasibility,and effects of China’s power industry applying public REITs,a new financing model,under the "dual-carbon" goals.Based on existing research,this paper extensively reviews and sorts out relevant research on power industry financing problems and financing models,REITs issuance motives and economic effects.Based on this,a unique framework and analysis method for analyzing the use of public REITs financing models in the power industry were constructed.This paper starts with an introduction to the case study,which provides a basic overview of the initiating party,Shenzhen Energy Group,and the underlying assets of the REIT in question.A description of the listing and issuance information of the Penghua Shenzhen Energy REIT is also presented.In the analysis section,this paper analyzes the financing model of the case study from four perspectives:the reasons for the issuance,scheme design,economic effects,and relevant risks.The article adopts a qualitative and quantitative combined method,including event study method,multivariate financial risk research method,financial indicator analysis method,etc.Based on the analysis of the case company,the article draws the following conclusions:Firstly,as China’s public REITs are still in the pilot and exploration period,there are still many problems in terms of laws,taxes,and other aspects.Whether public REITs can be applied to power companies should be based on the company’s own situation,and blind follow-up or observing from the sidelines should be avoided.Secondly,based on the similarities between public REITs that have been listed and issued and the REITs in this case study,almost all of them are high-quality underlying projects with good operating conditions,excellent financial performance,and outstanding revenue-generating ability.Therefore,high-quality infrastructure projects are the fundamental guarantee and core elements for the successful issuance of REITs.Finally,based on the combination of China’s macro policies and the analysis content of this article,the article believes that promoting the transformation of financing models and optimizing capital structure is the fundamental way for power companies to improve their sustainable development capabilities under the "dual-carbon" goal.In addition,based on the summary of research conclusions,the article puts forward relevant development suggestions for the initiator Shenzhen Energy Group,other companies in the power industry,and the government,respectively.As a typical traditional energy and power industry,Shenzhen Energy Group’s business model and financial situation have certain industry representation.Therefore,through a case study of the application of public REITs by Shenzhen Energy Group,this article hopes to extract its successful experience,analyze related risks and shortcomings,explore new ideas to alleviate the current financing difficulties in China’s power industry under the "dual-carbon" goal,and help the power industry efficiently finance,improve their own financial problems,and smoothly realize green and low-carbon transformation,contributing to the realization of China’s "dual-carbon" goal and high-quality economic development.