Electricity securitization in China

This paper discusses the past and the status quo of electricity securitization in China. First, the stranded cost securitization in American electricity industry and the ongoing securitization progress in emerging market countries are investigated, which enlightens the way of electricity securitization in China. Through analysis of electricity industry in China, the paper proposes constructive policy suggestions for regulators who intend to prompt securitization to develop electricity infrastructure, and detailed recommendations for companies who plan to raise money at reduced cost. It is concluded that even though it is at the very beginning stage in China, securitization not only provides financing for investment projects, but also speeds up the reform by stranded cost securitization, a novel idea for electricity industry in China.