[Business Opportunities] 500 smart city pilot projects will invest over one trillion yuan to boost the lighting industry

Recently, Shan Zhiguang, deputy director of the Information Research Department of the National Information Center, revealed in Hangzhou that the country is building a cross-departmental smart city coordination mechanism and supervision and assessment mechanism, and formulating a smart city capability and effectiveness evaluation system to strengthen the guidance and supervision of smart cities. The effectiveness of smart city construction in various regions must be recognized by the state.

It is reported that more than 500 cities in our country are conducting smart city pilot projects, and all have issued corresponding plans, with planned investments exceeding one trillion yuan. Currently, three batches of smart city pilot projects have been released. Judging from the actual results, smart cities have achieved extensive results in urban transportation, medical care, government management and other fields.

According to Shan Zhiguang, the National Development and Reform Commission has taken the lead in coordinating 25 ministries and commissions since October last year and established an inter-ministerial coordination working group to promote the healthy development of smart cities. The working group has begun to hold regular inter-ministerial meetings and expert meetings, emphasizing rational and pragmatic work, and studying the integration of smart city construction with the "Belt and Road", Beijing-Tianjin-Hebei integration, Yangtze River Economic Belt construction and other developments, and working hard to promote the standardization of smart city construction.

“The inter-ministerial coordination working group is currently building an inter-departmental smart city coordination mechanism and supervision and assessment mechanism.” Shan Zhiguang said, “In the future, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and other ministries will conduct major inspections on the effectiveness of smart city construction in various places.”

The 500 smart city pilot projects will help stimulate demand for smart lighting and smart home markets. This is undoubtedly good news for companies that have been involved in LED smart lighting and smart homes in the past two years. However, how to benefit from smart city projects has become a worry for LED companies. At present, there are three main sources of funds for the creation of smart cities: 1. Government investment, mainly in infrastructure; 2. Corporate investment, with the PPP model (public-private partnership model) being a typical case; 3. Loans from financial institutions. The PPP model is the main means for LED companies to eat the cake of smart city projects.

Before the PPP model, the EMC model was once popular among LED companies. However, as the government issued documents to cancel energy management contract (EMC model) subsidies and vigorously develop the PPP model, many LED companies quickly converted the EMC model to the PPP model. However, the PPP model puts great pressure on cash flow for LED companies, and only large companies or listed companies with strong financial strength can afford it. In fact, the PPP model is a variant of the EMC model. The PPP model is self-investment + government investment, and the project amount is higher: EMC's maximum is more than 10 million yuan, and the PPP model can reach hundreds of millions of yuan.