Canadian Solar (Nasdaq: CSIQ) announced a broad strategic cooperation with one of China’s largest power generation companies.
Under the far reaching agreement, Canadian Solar and the Guodian Power Development Co., Ltd. (600795.SS) will design, invest, build, operate and maintain PV power plants in China. As specified in the agreement, the two parties will work together as strategic partners in Gansu, Ningxia and Inner Mongolia first and will work to develop new markets in other provinces in the future.
Under the agreement, Canadian Solar and Guodian Power Development will initially form a joint venture focusing on PV power plants, with Guodian Power Development holding a majority interest in the proposed PV power plant projects. Canadian Solar will have first right to sell modules and EPC services to the joint venture at market pricing. The agreement initially calls for two grid-connected PV power plants in Ningxia: One project targets 50 MW total installed capacity, with a first phase of 10 MW. A second project will also have a first phase of 10 MW, with further expansions later. The Ningxia PV power plants are designed to establish a scalable model for future business development between Guodian Power Development and Canadian Solar.
Mr. Jun Miu, vice president of Guodian Power Development Co., commented, "Guodian Power Development Co.’s target is to achieve 510 MW of installed PV capacity in China by 2012. We also have a strong interest in overseas expansion. Today’s announcement with Canadian Solar is critical to our successful achievement of that goal. We are pleased to have a proven, financially strong and trusted partner like Canadian Solar, as Guodian Power Development moves forward in its important solar expansion effort. We are confident that working together, we can build a complete PV industry supply chain and a strong partnership."
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented: "We are proud to partner with Guodian Power Development and to reach a formal cooperation agreement with them in China. Our target is to become the leading supplier for Guodian Power Development’s anticipated 400 MW to 500 MW of PV projects in China and support its overseas expansions. Canadian Solar’s anticipated ramp up in module production capacity of 820MW this quarter will prepare us for near term production growth."
Guodian Power Development Co. Ltd is a subsidiary of state-owned China Guodian Corporation (Guodian), one of the five largest national power generation groups. Guodian has power plants in 29 Chinese provinces, employing more than 110,000 people. It engages in the development, investment, construction, operation and management of power generation assets, and the production and sales of electricity and heat.
By the end of June, 2009, Guodian’s total installed capacity reached 7,490 megawatts (MW), including 6,687 MW thermal, 471 MW hydro, and 325.6 MW wind power.
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