CBD Energy, along with its wholly owned subsidiary ecoKinetics, has signed a memorandum of understanding (MOU) with the Tianwei Group for a solar equipment manufacturing business in Australia. According to the terms of the MOU, Tianwei will own 5% of the joint venture company, and will increase its ownership stake to 51%, once the Chinese and Australian governments approve the deal, exchanging its brand and technology to be used in the JV company.
The JV company will produce solar PV modules with integrated operating systems, for which Tianwei will provide exclusive manufacturing rights for the equipment in Australia to the company. The initial annual production capacity is set to 50MW of modules with anticipated revenue of US$100 million.
According to CBD Managing Director, Gerry McGowan (pictured), “This is a big vote of confidence by Tianwei in CBD’s vision and capabilities and both companies see significant potential around solar manufacturing in Australia. We believe opportunities for selling solar equipment can only increase in attractiveness in coming years, especially since community support for solar is strong as consumers struggle with increasing power prices. The advantage for CBD in being involved in manufacturing is that it increases the extent of the value chain captured by CBD. It makes CBD Australia’s first integrated solar company, encompassing manufacturing of solar modules, inverters and racking as well as installation, servicing and wholesaling. The venture also provides equipment for our own projects and those with our Chinese partners while adding value to the Australian economy by providing investment and jobs.”
The MOU additionally states that solar products from the manufacturing operation will be primarily sold to ecoKinetics projects in Australia and international locations or to internationally located joint projects with Tianwei. Further, any technology improvements will remain in the joint venture. The MOU also outlines that manufacturing rights in Australia will be solely for the JV and that Tianwei’s PV laminates will be used in manufacturing and purchased at agreed upon prices. Finally, CBD will disclose its knowledge with Tianwei for assistance in engineering and construction for international projects that Tianwei pursues.
Government approval and a formal agreement are expected to be obtained and completed by the end of March 2011.