Canadian Solar announced today that has entered into a breakthrough purchase and international joint venture agreement with SkyPower Limited. The agreement joins one of the world’s largest solar companies and Canada’s largest owner and developer of solar projects into a powerful team to fabricate and deploy solar energy solutions in Ontario, as well as jointly develop solar projects in other select emerging markets internationally.
Canadian Solar will acquire a majority interest in 16 of SkyPower’s solar projects, representing approximately 190-200MW DC. All 16 of the projects were awarded a 20-year power purchase contract by the Ontario Power Authority. Fifteen of the projects were issued under Ontario’s Feed-In-Tariff Program, with the remaining project being issued as part of Ontario’s Renewable Energy Standard Offer Program. All of the projects are in the advanced permitting stage and are expected to begin construction in 2013 and fully operational in 2014. In total, they are expected to generate over C$ 800 million (US$ 800 million) in revenue for Canadian Solar.
Another facet of the agreement is that Canadian Solar and SkyPower will form a 50:50 international joint venture focused on the development of solar power plants in select emerging markets. Canadian Solar believes this strategic international partnership will start generating revenue as early as the next two to three years.
The transaction price is approximately C$ 185 million (US$ 185 million) to be paid over at certain milestones. Canadian solar will assume certain security deposits. Concurrent with the transaction SkyPower will receive a five-year warrant for 9.9% of Canadian Solar’s outstanding shares, featuring a strike price of US$ 5.00.
Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: “We are pleased to expand our partnership with SkyPower after successfully building three projects for them in Ontario over the past 12 months. This transaction solidifies our Ontario pipeline well into 2014 and supports our stated goal of achieving 40 percent of revenue from providing solar power plants and total system solutions in 2013. Importantly, while the total mega wattage in the transaction is significant, at approximately 190 to 200 MW, the actual project sizes are directly aligned with our strategy of concentrating on smaller utility scale projects that individually are less risky to finance and execute on. We remain open to larger projects should the opportunity be matched with our ability to obtain financing and construct the projects and we are excited about the opportunity to expand our relationship with SkyPower in select international markets through our new joint venture.”
Kerry Adler, President and Chief Executive Officer of SkyPower, said: “We have a successful history working together with Canadian Solar on developing and building solar projects in Canada. We are pleased to have such a strong partner in terms of industry expertise, brand and bankability. We will continue to invest in and build our extensive solar pipeline across Ontario and we look forward to expanding internationally in select markets under this new joint venture.”
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