“If you get onto the Forbes list you’ll be dead meat in no time,” or so advises an excerpt from the Chinese novel The Curse of Forbes.
That isn’t something that would bother Li Hejun, chairman of Hanergy, who made his debut on the Forbes China Rich List this year in fourth place with a net worth of $10.9 billion.
Born in 1967 in Guangdong, Li graduated from Beijing Jiaotong University with a degree in mechanical engineering in 1988. He borrowed Rmb50,000 ($8,196) from a professor and started his businesses. According to Li’s own account, he tried everything from trading electronic parts and bottled water to ventures in mining and real estate. By 1994, he saved Rmb80 million and then began investing in clean energy projects. The first was a Rmb2 million hydroelectric dam on a river in Guangdong where he swam in his youth. Similar projects soon followed.
In 2002, Li signed an agreement to build six of Yunnan province’s eight hydropower projects. At that time, no private firm had invested in a hydroelectric dam that exceeded 1 million kilowatts of capacity and the National Development and Reform Commission (NDRC) vetoed the deal. Li responded by suing and ended up getting just one of the projects approved.
Li then expanded into wind farms and solar power. According to Forbes, he now controls 10 dams, 18 solar power plants and 2 windpower sites. Most of these are unlisted assets controlled by Li’s holding entity, Hanergy Holding. After a 300% gain in share price so far this year, the Hong Kong-listed unit Hanergy Solar is worth $4.6 billion.
Li has taken advantage of the downturn in the solar market to make a series of purchases of foreign assets. A key acquisition last year was Germany’s Solibro (see WiC154), which gave him access to its technology. Unlike more conventionally rigid solar panels (made by the likes of Suntech) Solibro’s thinner panels can be pasted onto buildings, in wallpaper style.
“Rather than investing in large power plants that sell to a big-utility-owned grid, as it has in the past, Hanergy is targeting individual buildings and rooftops with thin-film that connects to building materials to create mini-power stations that don’t draw down power from a grid,” Forbes reports. “China’s new policies to boost solar are encouraging development of just that kind of ‘distributed’ power generation.”
Need to know
Li – who bought a couple of Gulfstream jets in 2010 – placed two advertorials in the Hong Kong press last week to explain how he became one of China’s richest men. But solar has proved a risky sector for tycoons, with Suntech’s founder Shi Zhengrong the prime example. Once top of the richlists himself, Shi then saw his firm go bankrupt.
History suggests that chasing the sun doesn’t necessarily guarantee long term business success. Li will hoping to be an exception.
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