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GCL-Poly Energy Holdings, a supplier of polysilicon, has signed a cooperative letter of intent with China Merchants New Energy to join forces to invest, develop and construct 973MW PV solar projects in China. Furthermore, GCL-Poly has also agreed to jointly develop new PV projects overseas.

Under the terms of the letter of intent, GCL-Poly will initially develop PV solar power projects —including ground-mounted solar plants, PV power distribution facilities and solar rooftops — over a three-year period during 2013-15. As part of the preliminary plan, it will develop solar projects with a total capacity of 200MW in 2013, 300MW in 2014 and 473MW in 2015, providing a total combined capacity of 973MW. The projects are expected to be located in the northwest, east and north China, however, they are not limited to these regions.

The aforementioned projects will be financed and owned by China Merchants New Energy while GCL-Poly will take on the responsibility for obtaining EPC, land and electricity tariff approvals. In addition, China Technology will be entrusted to facilitate matters regarding the acquisition of projects.

The letter of intent also outlines details concerned with the shares of GCL-Poly’s projects. Acquisition of the shares will be based on an IRR hurdle rate set by China Merchants New Energy. Moreover, GCL-Poly has agreed to gradually transfer the equity interests in its US solar plant assets to China Merchants New Energy.

Zhu Gongshan, chairman of GCL-Poly, commented, “We are very pleased to cooperate with China Merchants Group, a large state-owned enterprise to establish the best and the most professional operating platform for the solar business in China. Being the world’s leading polysilicon and wafer manufacturer, GCL-Poly does not only possess leading cost advantage in manufacturing but also is very experienced in PV projects development and EPC execution. As such, we are well positioned in both the project applications and approvals for the ‘Golden Sun’ solar subsidy programme based on our unique resource advantages. By cooperating with our strong strategic partners, we believe that the group will be able to further increase the market demand for our polysilicon and wafer products and at the same time to push forward our downstream solar farm business development. Through this cooperation, we expect to further expand our system integration and PV rooftop solar power system business to the high potential China and US solar markets.”

In recent months, GCl-Poly has signed several agreements to develop and build PV solar projects in China and Europe. It entered into agreements with Chinese state-owned PhonoSolar in June 2012, and Winsun New Energy and Shunfeng Photovoltaic in May 2012.