Research On The Application Of Lease Securitization In Hydroelectric Projects

With the unceasing rising of electricity consumption in China, the demand for hydroelectric power is constantly increasing, the hydropower installed capacity has been improved accordingly. China’s hydropower installed capacity is rising. Although operating costs of waterpower is lower, the investment is large, money demand is bigger. In this paper, the shortage of funds for hydropower projects is alleviated by the lease securitization.The core of this paper is the application of the leased asset securitization in hydropower projects. The innovation of this paper is that through the way of lease to achieve the conversion of a unstable hydropower revenue cash flow into a stable rental income cash flow, and then the latter be designed to leased asset securitization products to meet hydropower project financing. Firstly, the thesis explains the background and significance of this study from the perspective of hydropower project financing and lease asset securitization and then analyze the lease securitization from the lease securitization developments and processes.The essay goes on to explain the difficulties faced by current hydroelectric projects nation-wide in the aspects of lack of funding and low property utilization ratio, based on the example of Huaneng Lancang River corporation’s hydroelectric project funding problem, and analyses the feasibility of lease securitization of this corporation. And explore the specific design scheme of lease securitization project for Huaneng Lancang River Group, including the establishment of the leasing company, design of the lease terms, operation of lease securitization and related party transactions design. Then elaborate the advantages of this scheme and implementation difficulties. Finally summarize in this paper.Overall, taking the perspective of maneuverability as the start point, this paper conducts the scheme design of lease securitization for the hydropower project of Huaneng Lancang River Group within the restraint of the existing laws and rules of financial market in China. It also elaborates the vast potential for future application of the securitization of leased assets in the financing of hydroelectric project.