On a Mission to Find the Balance between Finance and Sustainability
by Ryan Yan Lai, MBA’14 and Environmental Finance and Impact Investing Fellow Candidate (10/21/13)
Doubling up, Ryan Yan Lai (MBA’14) split his summer between two internships both focused on energy and finance, first with Yingli Green Energy and then with Morgan Stanley.
As an Environmental Finance and Impact Investing Fellow Candidate, I have been thinking about ways to get broad exposure to both the financial services industry and environmental finance sector. Having applied to positions within both fields, I was able to negotiate positions at both Yingli Green Energy and Morgan Stanley. Although challenging, these summer experiences rewarded me with a comprehensive understanding about the renewable energy industry overall and how the modern investment banks can facilitate the growth of the green energy sector.
Yingli Green Energy (NYSE: YGE) is the world's largest solar panel manufacturer. I worked as a summer intern for one of its largest overseas offices, Yingli Americas, reporting directly to the CFO. I was largely responsible for optimizing the project financing plan for investment and exploring new avenues of financial support for the day-to-day business. One such opportunity was a revolving credit loan from one of Yingli’s main creditors in China, Bank of Communications. If accepted, the loan would provide working capital and trade finance for Yingli America’s daily trading business and operations. Although designed by the Bank of Communications Headquarter in China, the loan would be issued locally by Bank of Communications’ branch in San Francisco to Yingli Americas.
While Yingli’s head office in China provided the collateral for the revolving credit loan, Yingli Americas was the one to benefit, by leveraging low interest rates in the US. The loan ultimately required a lot of coordination and knowledge about both financial markets and banking systems. I was able to capitalize on my multi-linguistic ability to collaborate with Bank of Communications’ staff in both countries to refine the financing model and design a financing plan for Yingli Americas to take advantage of potential long-term benefits. Using the model I created, Yingli could calculate the exact financial benefits incurred through the use of the revolving credit loan. In the final presentation to senior management at Yingli Americas, I persuaded them to consider this innovative financing product and received tremendous support for further implementation. In the end, this practice became a guideline for Yingli to collaborate with the other banks in China and maximize potential benefits.
After my short summer internship at Yingli Americas, I moved to Hong Kong, where I worked as a Summer Associate for Morgan Stanley. As a Summer Associate, I rotated through Mergers & Acquisitions (M&A), Energy, Natural Resources, Financial Institutions, and Power & Utilities Groups, while covering multiple industry clients. I worked with industry clients' economic buyers, addressed emerging issues, led live transactions, and facilitated business development efforts with an aggregate amount that exceeded $2Bn. At the same time I also went through a systematic training for case studies, financial modeling, presentations, communications, and leadership skills. I led my team of analysts and advised a buy-side client for a cross-border transaction in Peru, including asset analyses and scenario planning. I conducted feasibility studies for a client to acquire a target listed on São Paulo Stock Exchange. I also prepared IPO filings and scenario analyses for pitching a large power and utilities firm in China. After extensively working in pre-acquisition due diligence, transaction implementation, and post-merger integration across different sectors, I have thoroughly honed my business development skills, problem-solving skills and interdisciplinary knowledge.
Furthermore, I helped some solar firms in their capital raising transactions and M&A opportunity analyses. As we know, the solar industry's overall debt deepened after the 2008 global financial crisis, which has obstructed financing for solar-power projects. Although global solar-power demand continues to climb every year, solar manufacturing has failed to keep pace. European demand, in particular, had been hit by the European Union's economic crisis and the rolling back of clean-energy subsidies. Meanwhile, although China had been very supportive of its solar industries previously, China's State Council signaled last December that it would stop funding unprofitable domestic solar-panel manufacturers and instead encourage mergers among major companies. The council also indicated it would bar local governments from supporting struggling companies and allow the market to determine winners and losers. As a result, most solar firms, especially those in China, are thirsting for cash. I leveraged my experiences in the solar industry and helped many firms similar to Yingli to raise capital and optimize their capital structure.
My work this past summer allowed me to blend my passion, dedication and energy for both finance and sustainability. I love solving complex problems and enjoy working in teams. I hope to use my global perspective and dynamic background as a trusted advisor to both sectors in the future. Exploring a sustainable balance between the two important sectors is always my most important mission.