China Development Bank has loaned an additional $713 million to the country’s largest polysilicon producer, reports Reuters.
Since 2010, the state-run bank has provided over $1 billion in loans to GCL-Poly Energy Holdings, which produces the raw material used to make solar cells.
Low-cost state loans are a major reason China has been able to scale up its solar manufacturing industry so quickly and cheaply, pushing US manufacturers to the brink of collapse.
Last year, the Bank offered more than $25 billion in loans to China’s largest solar panel manufacturers which now are creating strong domestic demand for GCL-Poly’s silicon.
LDK Solar (NYSE: LDK) received a loan for $8.9 billion, Suntech Power Holdings (NYSE: STP) received $7.3 billion, Trina Solar (NYSE: TSL) received $4.4 billion, and Yingli Green Energy (NYSE:YGE) $5.3 billion.
Three US solar manufacturers filed for bankruptcy in the last five weeks – Solyndra, SpectraWatt, and Evergreen Solar – and each noted that it couldn’t compete with low-cost manufacturers in China at a time when oversupply in the solar module market is pushing prices down even further.