Canadian Solar and SkyPower Combine in Ontario and Overseas Projects

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Canadian Solar Incorporated (NASDAQ:CSIQ) (Guelph, Ontario) has acquired a majority interest in 16 solar photovoltaic (PV) projects in the Canadian province of Ontario from SkyPower Limited (Toronto). The projects are in the advanced permitting stage and total between 190 and 200 megawatts (MW) of capacity.

Construction on the projects is expected to start in 2013, and full commercial operation is scheduled for 2014. In addition to the Ontario projects, the two companies have launched a joint venture, CSI SkyPower, to develop and build PV plants in Africa, the Middle East and South America.

All of the 16 PV projects have been awarded a 20-year power purchase agreement (PPA) through the Ontario Power Authority (OPA), 15 under the province's fee-in-tariff (FiT) and one through the renewable energy standard offer program.

Canadian Solar estimates that the projects have the capacity to generate more than $780 million in revenue. The company has paid about $180 million in aggregate transaction price, which will be paid in full as project milestones are met. Canadian Solar has made a $68 million partial payment on the projects. As part of the transaction, a five-year warrant was issued to SkyPower for 9.9% of Canadian Solar's outstanding shares, with an exercise price of $5 per share.

SkyPower President and Chief Executive Officer Kerry Adler said that the CSI joint venture fuses Canadian Solar's technological edge in PV manufacturing, installation and operations with SkyPower's expertise in developing solar projects in regions where a limited supply of electricity is one of the major challenges for growth.

"We believe that this partnership will contribute to the economic growth of the countries we work in by providing speed to market from project development to power generation," Adler said.

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