China Longyuan Power's Debt Play: How Ultra-Low Borrowing Costs Are Fueling Wind Dominance

China's push to achieve carbon neutrality by 2060 has turned renewable energy firms into strategic crown jewels. Nowhere is this clearer than at China Longyuan Power Group, the nation's largest wind power producer, which is leveraging record-low borrowing costs to turbocharge its growth. Recent bond issuances totaling RMB4.3 billion—a RMB2.3B ultra-short-term debenture and a RMB2.0B green mid-term note—highlight a playbook that combines financial prudence, state-backed credibility, and a goldmine of wind assets. For investors seeking to profit from China's green transition, this is a moment to take notice.

The Debt Machine: Refinancing at Historic Rates

Let's start with the numbers. On April 18, 2025, Longyuan priced a three-year RMB2.0 billion green mid-term note at a 1.78% coupon rate, 40 basis points below the 10-year Chinese government bond yield of 2.18%. Just months earlier, it issued an 180-day RMB2.3 billion ultra-short-term debenture at a 1.54% rate—both historic lows for corporate borrowing in China.

These ultra-low rates are not just about cost savings. They reflect investor confidence in Longyuan's top-tier credit ratings (S&P Global: A-, Moody's: A3), which are among the highest for Chinese corporates. But the real magic is how the company is deploying this cheap capital:
- Refinancing high-cost debt: Proceeds are used to repay older bonds, such as a RMB3.0 billion note from 2023, slashing annual interest expenses. Analysts estimate savings of RMB900 million annually—cash that can now fund new wind farms.
- Green expansion: The mid-term notes are explicitly earmarked for projects aligned with China's 2030 carbon goals, including wind farms in key regions like Inner Mongolia and Xinjiang.

Why This Matters: State Support, Premium Assets, and Tailwinds

Longyuan's edge isn't just its borrowing costs—it's its strategic advantages:
1. State-backed moat: As a state-owned enterprise (SOE), it benefits from implicit government support, a critical factor in credit markets. This is no small thing in China's opaque corporate landscape.
2. Prime wind locations: With projects spanning over 20 provinces, Longyuran has first-mover access to the best onshore wind sites. Its installed capacity of over 20 GW—more than rivals like Goldwind or Trina—gives it economies of scale.
3. Policy tailwinds: China aims to raise non-fossil fuel energy consumption to 25% by 2030, with wind and solar expected to account for 40% of new power generation capacity. Longyuan is the clear beneficiary.

The Investment Case: Valuation vs. Growth

Critics might argue that Longyuan's stock—up 15% since early 2024—has already priced in its positives. But here's why it's still a buy:
- Low valuation multiples: Trading at just 7x 2025E EV/EBITDA, it's a discount to global peers like NextEra Energy (12x) or Ørsted (15x).
- Free cash flow generation: With refinancing costs slashed, its wind farms—operating at stable margins—will deliver predictable cash flows.
- ESG tailwinds: The RMB2.0B green bond taps into a $40 trillion pool of ESG-focused capital, which is increasingly demanding exposure to China's green transition.

Risks? Yes, but Manageable

No investment is risk-free. Risks include:
- Global economic slowdowns: But Longyuan's state-backed nature and domestic focus mitigate this.
- Policy shifts: However, China's carbon targets are structural, not cyclical.

Conclusion: A Play for the Decade

China Longyuan Power isn't just a wind farm operator—it's a financial engineering powerhouse turning cheap debt into growth. With borrowing costs at record lows and policy backing unshaken, it's primed to dominate an industry that will only expand.

For investors seeking exposure to China's green transition, this is the stock to watch. The question isn't whether Longyuan will thrive—it's whether you're willing to miss out on a once-in-a-decade opportunity.

Act now—before the wind blows you away.