Canadian Solar Inc. and SkyPower Global ("SkyPower") today announced the close of their landmark purchase transaction, under which Canadian Solar has acquired a majority interest in 16 solar projects representing approximately 190-200MW DC from SkyPower. The companies also formally launched their new international 50:50 joint venture agreement, called CSI SkyPower.
Each of the 16 solar projects was awarded a 20-year power purchase contract by the Ontario Power Authority. Fifteen of the contracts are issued under Ontario's Feed-In-Tariff Program, and one of the contracts is issued under Ontario's Renewable Energy Standard Offer Program. The projects are in the advanced permitting stage and are expected to commence construction in 2013 and be fully operational in 2014, with the capacity to generate over C$ 800 million (US$ 785 million) in revenue. The aggregate transaction price is approximately C$185 million (US$ 181 million) payable in accordance with certain milestones. A C$ 70 million (US$ 69 million) partial payment for the transaction has been made. As part of the transaction consideration, a five-year warrant was issued to SkyPower for 9.90% of Canadian Solar's outstanding shares, with an exercise price of US$5.00 per share.
CSI SkyPower Joint Venture
The companies' 50:50 joint venture agreement creates an exciting new opportunity leveraging the expertise and strengths of Canadian Solar, one of the world's leading solar module manufacturers, and SkyPower, Canada's largest owner and developer of solar power projects. SkyPower combines its development expertise with Canadian Solar Inc.'s leadership in innovation, Engineering Procurement and Construction (EPC) and module manufacturing.
The international joint venture will operate in Africa, the Middle East and South America. In each of these target regions, the joint venture will work to bring clean, stable and economically feasible solar-generated electricity through the pursuit of power purchase agreements and the development and construction of solar power plants. It is expected that the development and construction of these solar power plant projects will bring investment and create jobs in these regions.
