January 5, 2010 / 1:05 PM / 9 years ago

China's Sanhua invests in Israeli solar firm

* Sanhua to invest $10.5 mln in Israel’s HelioFocus

* Sanhua to hold 30 pct, IC Green Energy 40 pct

* Chinese firm to do some manufacturing for HelioFocus

By Tova Cohen

TEL AVIV, Jan 5 (Reuters) - Zhejiang Sanhua 002050.SZ signed an agreement on Tuesday to invest $10.5 million in solar thermal systems developer HelioFocus, marking the first direct investment by a Chinese company in an Israeli firm.

HelioFocus Chief Executive Uri Zik said Sanhua, a producer of components and control parts for air-conditioning systems, would be not just a financial investor in the company, but will also produce some solar thermal components.

“We will be able to reduce costs and move relatively quickly to manufacturing,” Zik told Reuters. “Components that can be made at lower cost in China will be produced there.”

Sanhua, which will hold 30 percent of HelioFocus, will invest $9.25 million directly in the company and will acquire $1.25 million worth of shares from its founders.

IC Green Energy, the renewable energy investment arm of holding company Israel Corp (ILCO.TA), is the largest shareholder in HelioFocus with a 40 percent stake. It will invest $2.3 million in HelioFocus alongside Sanhua’s investment.

The rest of HelioFocus, which was founded in 2007 and has raised over $20 million, is held by workers and management.

Zik said the company, whose system converts the sun’s rays into hot air to produce electricity, will release its first product in 2012 and is working on a pilot project in Israel. Funds raised from Sanhua will be used by HelioFocus to continue its research.

“We believe that the thermo-solar market will grow significantly, together with the rapid global development and ongoing legislation in the clean energy market,” Yom Tov Samia, chairman of HelioFocus and president and CEO of IC Green Energy, said in a statement.

Jacky Eldan, Israeli consul general in China, said the door opened by Sanhua will pave the way for more cooperation and investments of Chinese companies in Israel. (Editing by David Holmes)

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