Starting from South America, speeding through the world

Chapter 167 Daddy's Little Whip
San Francisco, California.

It was a cloudy day, with a cold wind mixed with drizzle blowing incessantly.

Looking from the pier, the harbour cranes in the direction of Auckland resembled extinguished lighthouses against the gray sky.

Li Hongyuan stood by the parking lot, tightening his dark jacket.

In the distance, faint protests could be heard, but they were quickly drowned out by police sirens.

He walked through an open area and entered the building through a side door.

There was no security check, and no registration.

As agreed, Li Hongyuan went directly to the third floor and stood outside an office with the sign "California State Government Energy and Infrastructure Coordination Office".

The room is not big.

The faces were still familiar.

A middle-aged white man, an Asian assistant, and a blonde woman.

The three of them were already seated.

They all stood up when they saw him.

The middle-aged man even extended his hand, saying, "Mr. Li, welcome."

Li Hongyuan shook hands and greeted them, his expression unchanged: "Thank you for arranging this meeting today."

Everyone sat down again.

The Asian assistant kept a straight face and didn't say a word the whole time.

Soon, he lowered his head and began to write and draw on the paper.

The middle-aged man coughed awkwardly twice and pulled out several stacks of printed documents from the folder.

“This document,” he said, “is the preliminary plan you sent two weeks ago.”

"The governor's office initially believes that it is worth exploring given the current fiscal environment."

Li Hongyuan smiled slightly and explained succinctly:
“We have taken into account the ‘Summary of Local Energy Operation Asset Valuation’ you released last month and readjusted the return structure and project ranking.”

"This is not debt financing in the traditional sense, nor is it a typical ESG incentive structure."

“Our suggestion is to have a local nonprofit organization in the state take over.”

"A five-year revenue transfer agreement was signed with a Singapore-registered energy efficiency promotion organization."

"It does not involve asset ownership, does not participate in construction, and does not assume execution risks."

"We only settle revenue based on the data results of energy conservation and carbon emission reduction, according to preset parameters."

"The technical verification can be carried out by a third-party organization designated by you."

The blonde consultant chimed in: "So, you mean you don't get involved in the operations, and only take a cut of the energy savings and carbon revenue?"

“Accurate.” Li Hongyuan nodded.

“We are not tied to the federal budget, we do not go through your fiscal system, and we do not need credit guarantees.”

"All fund settlements can be completed at designated banks within the state, and the process is auditable and traceable."

The Asian assistant scoffed, "That sounds too clean to be true."

He drew a heavy circle on the document with his pen.

"No equity holdings, no bond issuance, and no guarantees."

"Is this a financial plan or a charity?"

Li Hongyuan did not shy away from the questions, and calmly stated:
"Caution is reasonable."

“We proposed this structure not to circumvent regulations.”

"Instead, we hope to provide you with a viable solution in the face of the continued paralysis of federal funding and the credit system."

He spoke slowly, as if deliberately leaving the other party room for understanding and choice.

"We understand your current situation—"

"Budget freeze, insufficient federal transfer payments, and state debt financing window essentially shut down, leaving many energy projects stuck in the early stages."

"Such structures were initially piloted in Malaysia and Chile."

“We do not touch ownership, nor are we involved in liabilities, nor do we constitute financial obligations, so naturally we are not included in your debt indicators.”

Hearing this, the middle-aged man was afraid that his Asian assistant would talk back to him again.

So, after Li Hongyuan finished speaking, he quickly said:

“We are not against continuing to move forward, but only if the state government retains control.”

"This includes the definition of data methods, the setting of exit mechanisms, and the right to interpret the reward distribution method."

“These can all be written into the memo,” Li Hongyuan responded tactfully. At this moment, it was the blonde woman who showed some concern: “Excuse me for being frank, but there is indeed a window now.”

"But for the state government, there will still be political resistance to rushing into a new structured financing approach."

“There are also many dissenting voices within our organization.”

“The situation is indeed developing,” she added in a low voice, “but not every part can keep up.”

“I completely understand,” Li Hongyuan said. “Therefore, we are not asking you to make any public commitments.”

He glanced at the voice recorder on the table: "If necessary, this meeting doesn't need to be formally recorded."

The room was quiet for a few seconds.

The middle-aged man said slowly, "I will submit the proposal to the policy review group."

"If all goes well, due diligence can begin next quarter."

"However, we will not publicly list this type of structure on the fiscal platform in the short term."

He paused, then looked up at Li Hongyuan: "Are you guys ready?"

"I'm ready to cooperate at any time."

The blonde woman watched Li Hongyuan and her boss leave together.

Immediately afterwards, a colleague with a face full of resentment also walked out.

She was soon left all alone in the room.

The woman pondered for a moment, then took out her phone from her pocket and tapped on the contact that was always pinned to the top of her address book.

California passed it.

They replied very quickly.

—Has the project been officially launched?

—Landed. Port energy-saving system, off-the-shelf structure.

—No budget, no bond issuance, no rating.

She stared at the screen, watching the "typing" message.

This time, a full half minute passed before a few words were sent.

The woman's expression changed drastically after reading it.

—Oregon has already implemented it.

Michigan followed closely behind.

—Currently, it seems that your progress ranks third.

She took two deep breaths and typed a question:
When do you plan to hand it over to the New York side?
—It's already been submitted.

—This morning I sent a summary of the briefing to the MI group at the NY Fed.

The woman frowned.

—How did they react?
—More vigilant than the Ministry of Finance.

The problem is not the amount of funding.

—This model is replicable and politically difficult to categorize.

—The state government’s attempt to economically bypass Washington is a dangerous sign.

The woman walked to the window and pulled up a corner of the blinds.

The parking lot was empty.

—How long do you think it will take for the Federal Reserve to start its closed-door meetings?
—It was bound to happen sooner or later, maybe in the next day or two.

—From what I understand, the NY Fed has already started scheduling internal meetings, and may bring along policy advisors from DC.

—So fast?!
—Darling, these days it's not just state governments that need a good whack from the Federal Reserve.

—Credit is tightening, liquidity is shrinking, and rating models are gradually falling behind.

Nobody wants to be the first to call it a systemic risk, but everyone is quietly crowding towards the door, afraid of being left behind.

The woman was amused by his humorous remark.

In an instant, the heaviness in my heart lessened considerably.

She thought for a moment and wrote in the text message:
Are you free this weekend? Maybe we can meet in New York.

—I promise, everything will be ready as long as you come.

　Subsequent updates will resume at normal times.

　　
　
(End of this chapter)