Tuesday, April 24, 2012

Canadian Solar and SkyPower enter into Purchase and Joint Venture Agreement

Solar PV leaders, Canadian Solar Inc. and SkyPower Limited have entered into a Purchase and Joint Venture Agreement, which creates a powerful team comprising of one of the world's largest solar companies and Canada's largest owner and developer of solar projects to build and deploy solar energy solutions in Ontario, and to jointly develop solar projects internationally in select emerging markets.

Under the agreement, Canadian Solar will acquire a majority interest in 16 solar projects representing approximately 190-200MW DC from SkyPower. Each of these projects was awarded a 20-year power purchase contract by the Ontario Power Authority. Fifteen of these contracts were issued under Ontario's Feed-In-Tariff Program, and one was issued as part of Ontario's Renewable Energy Standard Offer Program. These projects are in the advanced permitting stage and are expected to commence construction in 2013 and be fully operational in 2014. They are expected to generate over $800 million CAD in revenue for Canadian Solar.

Canadian Solar and SkyPower have also agreed to form a 50:50 international joint venture focused on developing solar power plants in select emerging markets. The JV company expects to start generating revenue from this global strategic initiative within the next two to three years.

The transaction price is approximately $185 million CAD to be paid at certain milestones. Canadian Solar will assume certain security deposits, which are typical with FIT contracts. In conjunction with the transaction, a five-year warrant is being issued to SkyPower for 9.9% of Canadian Solar's outstanding shares, with a strike price of $5.00 USD.

Source: Canadian Solar Inc. Press Release


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