21.IPP SOLAR PARKS, INVESTMENT PROPERTY

(1) IPP Solar Parks

At the end of each reporting period, the Group’s solar parks, which are held for use, consisted of the following:

	Permits (including related costs capitalized in the course of obtaining permits) and solar parks under development		Completed solar parks		Total
	Thousand USD		Thousand USD		Thousand USD
At January 1, 2015	61,877		151,481		213,358

Additions	104,727		—		104,727
Transfer	(126,494	)	126,494		—
Exchange adjustments	(2,751	)	(15,307	)	(18,058	)
At December 31, 2015	37,359		262,668		300,027

Additions	42,895		2,575		45,470
Acquisition of subsidiaries (Note 33)	—		34,158		34,158
Transfer to investment property	(104	)	—		(104	)
Reclassified as held for sale (Note 19)	—		(60,667	)	(60,667	)
Disposal of subsidiaries (Note 34)	—		(18,407	)	(18,407	)
Disposal of solar parks	—		(3,671	)	(3,671	)
Transfer	(42,330	)	42,330		—
Exchange adjustments	(1,344	)	2,975		1,631
At December 31, 2016	36,476		261,961		298,437

Additions	36,589		110,210		146,799
Disposal of solar parks	(1,979	)	—		(1,979	)
Disposal of subsidiaries (Note a)	(669	)	(834	)	(1,503	)
Transfer	(17,150	)	17,150		—
Exchange adjustments	(636	)	4,702		4,066

At December 31, 2017	52,631		393,189		445,820
DEPRECIATION AND IMPAIRMENT
At January 1, 2015	270		32,478		32,748

Provided for the year	—		9,229		9,229
Impairment provided for the year	1,706		129		1,835
Exchange adjustments	—		(3,208	)	(3,208	)

At December 31, 2015	1,976		38,628		40,604

Provided for the year	—		14,208		14,208
Impairment provided for the year	2,151		—		2,151
Reclassified as held-for-sale (Note 19)	—		(25,983	)	(25,983	)
Disposal of subsidiaries (Note 34)	—		(1,560	)	(1,560	)
Disposal of solar parks	—		(80	)	(80	)
Exchange adjustments	(217	)	(1,939	)	(2,156	)

At December 31, 2016	3,910		23,274		27,184

Provided for the year	—		14,272		14,272
Impairment provided for the year	5,120		101		5,221
Disposal of subsidiaries (Note a)	—		(19	)	(19	)
Exchange adjustments	357		1,400		1,757

At December 31, 2017	9,387		39,028		48,415

CARRYING VALUES
At December 31, 2015	35,383		224,040		259,423

At December 31, 2016	32,566		238,687		271,253

At December 31, 2017	43,244		354,161		397,405

In February 2017, Sky Solar Japan KK(“SSJ”), a wholly-owned subsidiary of the Group, entered into a share purchase agreement to sell its all shares of Tokyo Solar Electricity KK(“TS”), with total purchase price of JPY 9.3 million (USD83 thousand). This disposal was aimed to maintain the strategy on high-voltage solar business, while TS was operated on low-voltage solar business with small sizes but high costs. The transaction was completed in February 2017, and the Group recorded a loss of USD 5 thousand.

Depreciation is calculated using the straight-line method over the estimated useful lives of 20 to 30 years for completed solar parks.

As at December 31, 2015, 2016 and 2017, the solar parks with carrying amounts of approximately USD 100.2 million, USD USD215.6 million and USD277.4 million, respectively, were pledged by the Group to secure borrowings with carrying amounts of approximately USD97.1 million, USD150.6 million and USD244.0 million, respectively. In addition, equity interests of an indirect wholly-owned subsidiary of the Company which held several IPP solar parks in Czech and trade receivables arising out of the business relations were pledged to a bank as at December 31, 2015, 2016 and 2017 to secure the respective borrowings.

During the year ended December 31, 2015, IPP solar parks operating in Greece were evaluated for impairment given the macroeconomic conditions prevailing in Greece. The recoverable amount of the IPP solar parks is calculated on the basis of value in use. During the year ended December 31, 2016, IPP solar parks operating in Greece were evaluated for impairment given the macroeconomic conditions prevailing in Spain. The recoverable amount of the IPP solar parks is calculated on the basis of value in use, and loss of USD 2.2 million was recorded.

During the year ended December 31, 2017, several developing licenses were discounted in Latin America, and the developing permits in North America were evaluated for impairment given the difference between the assets’ carrying amount and present value of estimated future cash flow discounted at the effective interest rate. As a result, an impairment loss of USD 5.2 million was recorded by the Group. In the year ended December 31, 2015 and 2016, such impairment was USD 1.8 million and USD 2.2 million, respectively.

(2) Investment Property

Included in the Group’s IPP solar parks are land acquired by the Group with carrying amounts of approximately USD9.5 million, USD11.3 million and USD11.3 million, respectively, as at December 31, 2015, 2016 and 2017. The Group transferred certain pieces of land with carrying amount of approximately nil, USD 104 thousand and nil, during the year ended December 31, 2015, 2016 and 2017, respectively, from IPP solar parks to investment property upon commencement of leases. The transfer is triggered by the sales of IPP solar parks assets situated on these land to third party customers. The land, being accounted for as investment property, has indefinite useful lives and is measured at costs less accumulated impairment losses, if any. The lease of land is an operating lease in nature and the future minimum lease payments under non-cancellable operating leases is disclosed in note 37.