The first phase of the joint venture will see a total capital expenditure of $77 million and is expected to be financed by through registered capital and debt.
Under the agreement 90 percent of the registered capital will be contributed by GCL and the remaining ten percent will be contributed by the Canadian Solar technology developer.
“We are very pleased to be partnering with Canadian Solar on a long-term basis,” Gongshan Zhu, chairman and CEO of GCL, said in a statement. “This partnership with Canadian Solar, one of the industry’s most innovative leaders worldwide, is central to our ability to strategically expand our manufacturing capacity and to reach our growth targets.”
Dr. Shawn Qu, chairman and CEO of Canadian Solar, also spoke of the strategic importance of the deal, saying that the joint-venture will supplement its other wafer arrangements and make Canadian Solar fully prepared to compete at 2 GW scale by early 2012.
“In GCL, we gain a valued long-term partner, with essential large scale manufacturing expertise,” Qu said. “We expect this venture to help further lower our manufacturing costs from the first quarter of 2012 onwards, and further improve Canadian Solar’s gross margins, with a minimal capital expenditure requirement.”
Canadian Solar also said it plans on announcing a joint venture in the first quarter of 2012 to build a 600 MW solar cell facility that will enable it to reach approximately 2 GW of internal solar cell capacity.
The company remains on track to expand its annualised capacity for solar cells to around 1.3 GW to 1.4 GW by mid-2011m and to reach an annualised capacity of 2 GW for module lamination at around the same time.
In addition, Canadian Solar also plans to announce a joint venture to build a 600MW solar cell facility that will enable it to reach approximately 2 GW of internal solar cell capacity during the first quarter of 2012.
As a result, the company said it will achieve a 2GW 'virtual vertical integration' from wafer to cell and module at the beginning of 2012.
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