SunEdison, PIF, Sanabil Investments Take Steps To Advance Solar Energy Industry In The Kingdom Of Saudi Arabia
SunEdison Inc. (NYSE: SUNE), a leading solar technology manufacturer and provider of solar energy services, and the Public Investment Fund (PIF) of the Government of Saudi Arabia and the Saudi Arabian Investment Company (Sanabil Investments), signed an agreement to jointly fund a feasibility study for the establishment of a vertically integrated solar PV (photovoltaic) manufacturing complex at Wa'ad Al Shammal in Saudi Arabia. This follows a successful preliminary study between the National Industrial Clusters Development Program (NICDP) and SunEdison in 2013.
The proposed project, entailing the production of polysilicon through modules, would support the growth of the solar energy industry in the Kingdom, and is consistent with SunEdison's long term strategy to:
- Develop attractive new markets to fuel SunEdison and industry growth,
- Maximize the value of our installed systems via the most cost competitive inputs, enabled by SunEdison's proprietary technology, and
- Improve our balance sheet through an equity light approach, again leveraging our proprietary technology.
This, and other deals like it, are designed to enable SunEdison's long term, downstream growth aspirations, which require significant supply capacity, accomplished in an asset light, balance sheet amenable way.
The complex would utilize both SunEdison's proprietary high pressure silane fluidized bed reactor (HP-FBR) polysilicon, and continuous Czochralski (CCz) crystal ingot technology and equipment, as well as include solar wafer, cell and module manufacturing, employ attractive debt financing for the approximately $6.4B project, and would begin production in 2017, ramping to 3 GW (gigawatts) annually. A significant percentage of polysilicon and ingot production would support the 3 GW planned module output, with the remaining crystal production addressing the market with a substantial cost advantage. Demonstrating strong support, the Ministry of Petroleum and Minerals pointed out it will provide the required quantities of natural gas, and the Saudi Electrical Company (SEC) will provide the needed power requirements for the project.
This project would enable local companies to gain access to and benefit from SunEdison's technology and downstream platform for solar energy development in Saudi Arabia and regional markets.
"We anticipate substantial growth of solar PV within the Kingdom and the region. This project will support that growth, and the growth aspirations of SunEdison and our Saudi partners," said Ahmad Chatila, CEO of SunEdison. "The combination of SunEdison technology, and the Kingdom's world-class manufacturing and energy sector expertise will enable us to capitalize on substantial growth in the Kingdom and the region, and maximize the value of solar PV projects supported by this venture."
Eng. Azzam Shalabi, President of NICDP said, "This project will be capable of building a complete industrial eco-system that is sustainable and able to compete on a global level by utilizing pioneering technology developed by SunEdison to produce high purity polysilicon, and high-efficiency, low-cost mono-crystalline ingots, in addition to benefiting from economies of scale given the size and vertically integrated nature of the complex."
Chatila concluded, "We will bring our downstream solar PV development expertise to the region, and will partner with the Kingdom to build a large and dynamic solar energy industry. This agreement represents our ongoing strategy to accelerate our growth, maximize the value of our PV projects, and strengthen our balance sheet to enable both. We are very proud to take this next step with our Saudi partners as the Kingdom becomes a world leader in solar energy."
SunEdison is a global leader in semiconductor and solar technology. SunEdison's semiconductor business has been a pioneer in the design and development of silicon wafer technologies for over 50 years. With R&D and manufacturing facilities in the U.S., Europe and Asia, SunEdison enables the next generation of high performance semiconductor devices. SunEdison's solar business develops, finances, installs and operates distributed power plants, delivering predictably priced solar energy and services for its commercial, government and utility customers. SunEdison's common stock is listed on the New York Stock Exchange under the symbol "SUNE." To learn more visit www.sunedison.com.
Forward Looking Statement
Certain matters discussed in this press release are forward-looking statements, including the estimated project cost of $6.4B; that the facility is expected to begin production in 2017; that the facility will have an initial capacity 3 GW; and a significant percentage of polysilicon and ingot production would support the 3 GW planned module output. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include the completion of the feasibility study, the availability of acceptable bank debt financing, the ability of the parties to reach expected capacity; delays or interruptions in construction and bringing the manufacturing capacity online; the timely availability of required permits and authorizations from governmental entities and third parties; changes in applicable regulatory requirements and incentives for production of solar power; and other risks described in SunEdison's filings with the Securities and Exchange Commission. These forward-looking statements represent SunEdison's judgment as of the date of this release. SunEdison disclaims, however, any intent or obligation to update these forward-looking statements.
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