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Suntech Power and Nitol Solar Expand Polysilicon Supply Agreement

Posted on: Thursday, 3 April 2008, 03:00 CDT

Suntech Power and Nitol Solar have announced an expansion to the terms of their existing seven-year polysilicon supply agreement which runs from 2009 to 2015.

Under the expanded agreement, Nitol has agreed to substantially increase the aggregate committed volumes to be supplied between 2009 and 2015.

Suntech recently announced a strategic investment whereby Suntech will acquire newly issued ordinary shares comprising a minority interest in Nitol Solar for a total consideration of up to $100 million, subject to the satisfaction of certain conditions. Suntech has already paid the first $33 million installment of this investment to Nitol Solar.

The proceeds from this transaction will enable Nitol Solar to advance the development of its new 3,700 metric ton polysilicon plant based near Irkutsk, Russia which is expected to be completed in 2009. The new facility will utilize advanced polysilicon production equipment and the mature Siemens production technique with advanced recycling process to ensure the clean and safe manufacture of purified polysilicon.

Zhengrong Shi, chairman and CEO of Suntech, said: "The expansion of our supply relationship with Nitol Solar further improves our long-term silicon outlook and provides a robust base to rapidly grow our business. With Suntech's financial strength from the recent capital raising and plans for rapid capacity expansion, we will continue to build relationships with silicon producers that increase our long-term cost visibility."

Source: Datamonitor

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