Risk Study On Public REITs Of Clean Energy Infrastructure

The 2020 "double carbon" target is proposed for China’s clean energy development momentum,and during the "14th Five-Year Plan" period,China will gradually reduce its reliance on thermal power,and the installed capacity of clean energy generation will increase,which will bring huge financing demand for the formation of high-quality assets.Although there are other financing methods such as bank loans,stocks,bonds and REITs,these financing methods have complicated approval procedures,affect the equity ratio,increase the debt ratio and poor liquidity.Electricity state-owned central enterprises are generally subject to the constraints of the leverage ratio assessment of state-owned enterprises,which to a certain extent restricts the scale of debt financing of electric power enterprises,and the scale of equity financing of electric power enterprises has been gradually declining in recent years.Thus,it can be seen that electric power enterprises are in urgent need of a new financing channel that does not have the above-mentioned defects.As a new investment and financing tool,public REITs for clean energy infrastructure fill these shortcomings by combining the characteristics of direct financing and equity financing.Clean energy projects have always faced the risk of cost fluctuation,and public REITs projects generally have the characteristics of high investment threshold,poor liquidity,long payback period and many participants,which inevitably face many different risk factors in the whole process of public REIT product operation.In July 2022,the first domestic clean energy infrastructure public REIT "Peng Hua Shenzhen Energy REIT" was successfully listed on the Shenzhen Stock Exchange,which has been listed for a relatively short period of time and has very few relevant case studies.Therefore,there is a practical need to conduct risk research on clean energy infrastructure public REITs.After combing through the literature and theoretical foundations of REITs risk research,this paper selects Penghua Shenzhen Energy REIT as the research object,introduces the current situation of risks faced by clean energy enterprises,and then introduces the basic situation of Penghua Shenzhen Energy REIT in terms of issuance background,issuance motivation,REITs product issuance profile and underlying assets project profile,in order to provide reference for the future development of clean energy infrastructure public REITs products.This paper provides a reference for the future development of clean energy infrastructure public offering REITs.Using literature search method,brainstorming method and Delphi method to identify and analyze each risk factor of Penghua Shenzhen Energy REIT in detail,then using hierarchical analysis method to obtain the weight of each risk indicator and construct the risk indicator system of clean energy infrastructure public REITs,using CIM model to calculate the risk evaluation result of Penghua Shenzhen Energy REIT as " Low".The main risks of Penghua Shenzhen Energy REIT are,in descending order of importance,project operational risk,policy risk,credit risk,market risk and other risks.Although the overall risk of Penghua Shenzhen Energy REIT is evaluated as low,the weight of each risk indicator in the risk indicator system varies greatly,with high weighting of secondary risk indicators such as cost fluctuation risk,income fluctuation risk,tax policy risk and principal agency risk.Further analysis of the reasons for this result from both the underlying assets and the external environment reveals that at the underlying assets level,the underlying assets are too homogeneous,the large cost fluctuations after the expiration of the AOGL and the revenue management strategy to be optimized lead to a high weighting of project operation risk,cost fluctuation risk and revenue fluctuation risk;at the external environment level,the tax policy system is not sound and the lack of perfect information disclosure system leads to a high weighting of Peng Hua Shenzhen Energy REIT.In the external environment,Peng Hua Shenzhen Energy REIT is exposed to certain tax policy risk and principal-agent risk.Based on the evaluation results,this paper proposes risk prevention recommendations for the underlying assets and the external environment from the manager’s perspective and the country’s perspective,respectively.From the manager’s perspective,the manager should diversify the underlying assets to diversify the risk of a single asset,sign new LTAs at the right time to lock in low-priced gas sources,and adopt an active and efficient revenue management strategy.From the national perspective,the country should improve the legal system related to REITs taxation and establish a perfect information disclosure system to create an external environment more conducive to the development of public REITs.The risk evaluation result of Penghua Shenzhen Energy REIT is "low",which indicates that there are advantages of this product for other clean energy companies to learn from.Therefore,this paper draws three insights to build the equity and debt structure through SPV,hire an external management agency and select high-quality underlying assets,aiming to provide some lessons for other clean energy companies to issue infrastructure public REITs.