China's PV overseas capacity is gradually gaining momentum, with the focus of its global expansion shifting to the Middle East. This evening, JA Solar Technology (002459.SZ) announced plans to invest in the construction of a project in Oman with an annual capacity of 6 GW for high-efficiency solar cells and 3 GW for high-power solar modules. The total investment for the project is 3.957 billion yuan, accounting for 11.27% of the company's most recently audited net assets.
The Middle East and North Africa have become new popular destinations for the global expansion of China's PV industry. JA Solar Technology mentioned in its investment objectives and impact statement that over 50% of its business comes from overseas markets. With the continuous growth in overseas market demand and the influence of international trade protection policies, the company has an increasingly urgent need to expand its overseas capacity layout. This overseas capacity project aligns with the company's globalization strategy and will enhance its overseas production capacity for high-efficiency products.
On July 17 this year, two other leading PV companies, Jinko Solar (688223.SH) and TCL Zhonghuan (002129.SZ), both announced plans to establish capacity in Saudi Arabia. Jinko Solar plans a 10 GW high-efficiency cell and module project, while TCL Zhonghuan plans to build a 20 GW PV crystal wafer project in Saudi Arabia.
A representative from Jinko Solar stated in an interview with a reporter from CLS that this represents the 2.0 model of PV globalization, characterized by local production and local use, with products primarily supplied to the local market.
To reduce investment costs and control overseas investment risks, Jinko Solar and TCL Zhonghuan have respectively introduced RELC, a subsidiary of Saudi Arabia's Public Investment Fund (PIF), and local enterprise Vision Industries Company as project investors. A joint venture company has been established in Saudi Arabia, with the three parties holding 40%, 40%, and 20% of the shares, respectively.
In its announcement this evening, JA Solar Technology similarly stated that it plans to establish a new project company as the main entity for investment, operation, and management of this project. The company intends to introduce external shareholders to participate in the project through a joint venture model. The registered capital of the project company will be determined based on project needs and will not exceed the total project investment amount.
Oman, located in the eastern part of the Arabian Peninsula, is also attracting investments from other solar cell companies. Junda Co., Ltd. plans to build a 5 GW high-efficiency N-type cell capacity project in Oman. According to the company's survey minutes released in November, on October 31, 2024, the company officially signed a Land Lease Agreement with local authorities in Oman and has been in ongoing discussions with the local government regarding details such as water and electricity. The Oman project is expected to commence construction by the end of 2024 and be completed and put into operation in 2025. Once completed, the Oman project will establish scarce overseas cell capacity to meet the demands of high-value markets in the Middle East, Europe, and the US.
It is worth noting that JA Solar Technology's capacity planning extends beyond this. According to industry media Polaris Solar PV Network, on November 21, Egypt signed a memorandum of understanding (MOU) with the UAE's Global South Utilities and JA Solar to establish two solar factories.
The agreement involves the construction of two production facilities, each with a capacity of 2 GW—one dedicated to manufacturing solar cells and the other to producing solar modules. As part of the MOU, Global South Utilities will support JA Solar in conducting feasibility studies and obtaining government subsidies. JA Solar will oversee the research phase, with the solar cell factory expected to require an investment of $138 million and the solar module factory $75 million, primarily serving the local market.
In response to this news, JA Solar Technology told a CLS reporter that the company has been actively exploring global capacity layouts. The signing of the MOU for the Egypt project represents a preliminary intention reached in collaboration with partners and other signatories. Further discussions will be held on the specific construction scale, shareholding ratios, and other details of the project to leverage the strengths of all parties and facilitate the project's implementation.
Earlier this month, another Chinese PV company, Boda New Energy, announced the groundbreaking of its Elite Solar Egypt project in the Suez region of Egypt. The project is located in the China-Egypt TEDA Suez Economic and Trade Cooperation Zone, covering an area of 78,000 m². It plans to build production lines for 2 GW of solar cells and 3 GW of solar modules, with full operation expected by September 2025.
Industry analysts believe that the Middle East has a huge demand for renewable energy, and Chinese PV companies are likely to expand their market presence by establishing local factories and making investments in the region.
