December 9, 2015 / 6:29 PM / 3 years ago

China's CGN to invest 1 billion euros in French solar project

GRADIGNAN, France (Reuters) - Chinese power group CGN will invest more than 1 billion euros ($1.10 billion) to produce solar energy in France through a partnership with a small Bordeaux-based company that provides photovoltaic panels mounted on farm sheds.

CGN, state utility EDF’s (EDF.PA) partner in Britain’s Hinkley Point nuclear plant project, has signed a deal with Inovia Concept Development that targets 1 gigawatt (GW) of annual power output within five years. Success in achieving that goal would put the project’s output on a par with production from a nuclear reactor.

The project will be the first foray into the French solar market for CGN-EE, the Chinese group’s European unit, its chief executive told reporters in Gradignan, near Bordeaux in southern France.

“France is a very safe country for investments, the feed-in tariff for solar electricity is very stable,” CEO Wei Lu said.

Solar power capacity has grown slowly in France compared with Germany, Spain or Italy.

But the slower start has allowed it to avoid the bursting of the solar bubble experienced in countries such as Spain and the Czech Republic, which have implemented retroactive taxes on existing operators of renewable energy installations, provoking a backlash from investors.

Inovia Concept Development already has a portfolio of 1,500 farm depots. It will build and maintain the 70,000 euro solar panel-bearing sheds for farmers who make an upfront payment of 8,000 euros.

CGN-EE will invest the rest, own the installations for 30 years and sell the electricity back to EDF. Farmers then gain full ownership.

To reach the 1 GW target, the two companies expect to have to build about 10,000 sheds and to start work on 200 of those by the end of the year.

The construction and maintenance for the project could create about 3,000 jobs overall, the companies said.

The deal follows the inauguration at the start of the month of a 300 megawatt solar farm — Europe’s biggest — at a nearby site covering 250 hectares south of Bordeaux.

($1 = 0.9117 euros)

Reporting by Claude Cannelas; Writing by Michel Rose; Editing by David Goodman

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