Integration of nuclear and finance is the only way for the industrial upgrading and sustainable development of nuclear industry. As a result, a crucial issue for future nuclear energy development lies on how to utilize various financial methods such as equity financing, venture capital, industrial investment fund, financial bonds issuing, merge and acquisition to boost nuclear development with dual drive of the industry and finance.
With the theme of "financing the future of nuclear industry", and "innovation, coordination, openness, environmental-friendly approach, and sharing benefits" as the five major concept, this forum is highly committed to solve the key issues in international energy economic development, so as to promote regional energy resource integration and sustainable growth, as well as to boost nuclear industrial upgrading with financial muscle.
This is a VIP ticket for employees of Ocean Nuclear.
China's nuclear power sector goes out at the right time, and in this context, the investment prospect of private capital and how to develop it in the future and other related issues become the focuses of this Forum. Several important members gathered and discussed these issues from their points of view and judgment.
Chief of International Energy Bureau of National
Collaborating Center of National Development and Reform Commission
Nobel Prize for Peace laureate,Vice Chair of the UN Intergovernmental Panel on Climate Change
Rosatom East Asia Deputy General Manager
Director China, World Nuclear Association
Famous Economist, Former Vice President
Professor of School of Economics, Peking University Vice President of Institute of Digital China, Peking University
PhD in Nuclear Engineering , University of Manchester, UK
Bureau Chief of China Energy Safety Research Institute
Director of Energy and Chemical Group of Investment Banking Committee of Citic Securities
Teacher Cao, Cao Heping, Vice Director of Institute of Digital China, Peking University, Can you introduce to us the advantages for Chinese nuclear enterprises to go out, especially private ones?
The domestic and foreign association formed by China and France has a total investment of 180 billion in the United Kingdom, with a capital contribution of 60 billion from China. Then what's the contribution of French Energy Group? It is technology! So, among the 180-billion investment, UK accounted for 1/3, France 1/3 and China 1/3 with capital.
In Project B, China needs to invest its Hualong No.1 from China Guangdong Nuclear Power Group. That is to say, China needs to invest not only technology but also construction. There are 250 enterprises in China and 250 ones overseas. For such investment strategy enterprises, how to deal with their investment and financing systems? So in my opinion, this activity organized by Ocean Nuclear just tells us in fact that the development of nuclear industry must be completed by an association of big leading enterprises and end manufacturing supporting enterprises. They have advantages in primary market, but the construction of secondary market is more important. The development of global nuclear depends on the development of Chinese nuclear. China's demand accounts for a large amount in the world. I hope that China can make more innovation in intelligent energy.
My question is for Zhuang Congsheng, party member and full-time vice chairman of All-China Federation of Industry and Commerce. As you know, China is weak in nuclear, so is our whole private enterprises. Do you have confidence in the going-out of Chinese private enterprises, like Ocean Nuclear? And Why?
As the chairman of China Private Economy Research Association, I contact with various entrepreneurs every day, from Pony Ma and Jack Ma to a table of entrepreneurs or even a person. But Ocean Nuclear is the first private enterprise that intends to invest nuclear overseas.
I ever spent more than two months investigating over 30 enterprises along the One Belt One Road engaged in foreign investment. Our private enterprises have been going out and participating in the construction of the One Belt One Road and their total volume accounts for 2/3 of foreign investment, already exceeding that of state-owned ones. There are around 20,000 enterprises which make investment overseas all over the country, but I have to admit a truth that 90% enterprise still don't make any profit. It is easier to say than to do.
Many entrepreneurs say that, because of different national conditions, cultures, laws, custom, habits and languages and so on, it always involves more than 10 times of energy to do foreign investment and there are always many problems. And as for investment in nuclear, I think it is very difficult for Ocean Nuclear to unite dozens of financial institutions and some foreign trust companies to do this.
To do foreign investment, private enterprises shall firstly have a strong body and have a clear idea of its own core competitiveness and ace; otherwise, it will easily fall sick halfway. Secondly, China has been gradually integrating into regional integration and globalization, so we shall be with international thinking while doing foreign investment. Thirdly, the core of all competition is the competition of talent. Therefore, we shall have talents with good knowledge of domestic and foreign legal language and market. The fourth one is the capital. And lastly, private enterprises in China also have a terrible problem - asymmetry of information.
All in all, it is very good for private enterprises to have passion, but they shall also show their ace! I hope that Ocean Nuclear can achieve success in foreign investment.
Professor Yang, as the chief scientist of Ocean Nuclear, you not only need to lead the team but also need to make global layout. May I kindly ask you to introduce to us your layout of the future of Ocean Future?
Regarding energy, the construction of power station takes a long term and involves a large amount of capital. So temporarily, this is not the first choice of Ocean Nuclear. Currently, we will make certain equity investment in SMR, which doesn't take a long term and is with lower financing risk.
Now I'd like to ask Francois Morin, Director for Chinese Region of World Nuclear Association. Now the minority of western media has a tendency to demonize China. Will there be any major challenge to China's future investment in Europe or other countries?
Indeed, the image of China in the world is not completely and truly reported by foreign media, for example, China's quality problems and so on. It was mainly in the 1990s and in the early 2000s that the quality of Chinese products was not very good then, but the image of China has changed dramatically. In fact, it is very easy to change, so I am not so worried about this issue.
As for the acceptability of the public, actually there are many mingling points. Don't forget the point that the public is actually smarter than the government. The public in China cares very much about science and objectivity.
Is there any possibility for China to build some small-scale nuclear power plants or nuclear projects in Sri Lanka?
Nuclear is indeed one of the development strategies of Sri Lanka, but now the way of decision in Sri Lanka is different. The leadership of the country cannot make decisions on a single basis but need a comprehensive assessment.
For example, from an economic point of view, what is the lowest-cost energy model? This is what we need to pay attention to. We are not saying that nuclear energy is the best, but compared with traditional energies, the cost of nuclear is lowest.
Apart from the cost, the attitude of the public is more important. We need to educate the public from different attitudes, especially the young group, who are with very obvious and very independent self-awareness and self-judgment.
I'd like to ask Dmitry Strelnikov, Vice-General Manager of Rosatom Corporation, that we know Rosatom built many nuclear power stations overseas, then did you ever consider reaching cooperation with Ocean Nuclear and other Chinese nuclear companies?
In my opinion, only companies intended to solve people's problems and social problems can achieve big success. No matter what you sell, cellphones, automobiles or establishing nuclear power stations, you need to solve people's problem. What problem does nuclear solve? We firstly need to know what people need. That is, they need good and cheap energy which shall be safe. Then what can solve these problems? One is technology and the other is money.
We already built two units in China and another two will generate electricity within this year. And now, there are still two new units. But there is no opportunity for us to cooperate in a third country momentarily.
Our company is also looking for partners for our oversea projects in India, Turkey and Egypt.
Gao Zhikai, Director of China Institute of Energy Security, you have many international experience, in your opinion, is it possible for China's private enterprises to go out in this field? What assistance can you offer?
I think that nuclear energy financing is the most complicated, the most risky and the most necessary financing in the world. Nuclear power financing is a true example of PPP cooperation and PPP financing. So I have an idea that it will be very interesting if Ocean Nuclear can launch a PPP financing scheme for its nuclear energy financing with Chinese characteristics and is available for trial around the world. Morin
As for nuclear energy financing, especially financing with Chinese characteristics, we can pool the wisdom and efforts of everyone. I am willing to share my experience to assist in developing a PPP financing scheme with Chinese characteristics.
Huang Yibin is the person in charge of securities investment bankers, what's your suggestion for going-out private enterprises, like Ocean Nuclear? What the capital market might think?
Firstly, I want to say something about the situation of financing of China's nuclear industry.
China's nuclear energy industry was initially led by the government. In 1985, China had its first self-made, self-operated and self-managed power station and this project was actually funded by the government.
With the reform of the entire power system China, the society discovered the economy of the entire nuclear power. Therefore, we can see that in 2014, China Guangdong Nuclear Power Group listed on H share and China Nuclear Power listed on A-share. The listing of these nuclear power companies, on the other hand shows that they want to raise funds for the construction of their nuclear projects, and on the other hand, I think it very important, that they are willing to share the economic benefits of nuclear power with the public in the next 30 or even 50 years.
Therefore, Ocean Nuclear cannot miss the opportunity of the huge increase of energy in the next 30 to 50 years as expected by Professor Francois Morin.
As for "going out", China is not so much success on the British market when compared with its achievement in Southeast Asia. We have very great prospects for these countries in Africa along the One Belt One Road. Regarding financing mode, I think we can consider some more radical equity financing models.