Shangrao Kangsheng Technology, a Chinese company formed by a consortium of buyers led by JinkoSolar chairman Xiande Li, will buy a 55% stake in Jiangxi JinkoSolar Engineering – better known as Jinko Power – for $250m in cash, it was announced Tuesday.

Unsurprisingly, given Li’s position, JinkoSolar’s board has approved the deal unanimously, and the transaction is expected to close by the end of the year.

The spin-off has been in the works for at least several quarters, as Jinko looks to deleverage its balance sheet.

New York-listed Jinko first began flirting with the idea of launching a yieldco in 2014, but the dislocation of the US yieldco market from 2015 forced the company to look at other options.

In Jinko’s last quarterly earnings call, chief executive Kangping Chen emphasised that work towards a spin-off of the downstream unit was progressing.

JinkoSolar, which may top Chinese compatriot Trina Solar to become the world’s largest supplier of PV panels this year, was among the first Chinese solar manufacturing giants to move decisively into downstream project development and operation.

As of 30 June, Jinko had grid-tied 1,130MW of capacity, nearly all of it in China. Those PV plants produced 327GWh of electricity for Jinko Power in the second quarter, up 61% year on year, while generating 288.5m yuan ($42.9m) of revenue.

Earlier this year JinkoSolar scored its first big win overseas by securing PPAs in Mexico’s first renewables tender, for three projects totaling 188MW(ac).

The precise arrangement between publicly listed JinkoSolar and soon-to-be-private Jinko Power is unclear. Jinko Power could effectively act as a private yieldco, buying projects that JinkoSolar develops so that it can quickly recycle capital back into new projects or its manufacturing operations.

Several large PV manufacturers that also have active downstream arms have launched yieldcos to separate those business activities, including First Solar and SunPower.

But the private nature of Jinko's spin-off reflects the cold attitude public-equity markets have taken towards solar companies in recent quarters, making yieldco IPOs a tough sell.

Canadian Solar contemplated launching a yieldco, but ultimately scrapped those plans due to poor market conditions, and has instead been selling stakes in its projects in one-off deals.