Renewable Energy Corp, the Norwegian maker of solar-energy components, will invest almost 13 billion kroner (US$2.5 billion) to increase production of wafers, cells and modules at a plant in Singapore.
The investment will be financed through a 10 billion-kroner loan and cash, and the expansion is expected to generate as much as 11 billion kroner in revenue in 2012, the Hoevik, Norway-based company known as REC said in a statement yesterday. Production will begin in 2010 and reach 740 megawatts of wafers, 550 megawatts of solar cells and 590 megawatts of modules by 2012.
“The project is fully financed and as such we can take away any speculation of REC raising any additional equity,” chief executive officer Erik Thorsen said during a Web cast to investors. “Over the next few years, REC will show decent growth in all areas.”
Demand for alternative energy sources such as solar and wind is increasing amid efforts to curb emissions of carbon dioxide, a gas blamed for global warming. Intel Corp, the world’s largest chipmaker, announced on Tuesday it would spin off its solar technology business and create a company called SpectraWatt Inc, saying demand will grow by as much as 40 percent annually.
SpectraWatt will open a plant in Oregon in the second half that will make photovoltaic cells and develop ways to cut the cost of solar technology, Intel said in a statement. Shipments will probably start in the middle of next year, Intel said.
REC said the investment is the first of “several planned development phases.” The company got a loan agreement worth 10 billion kroner to help cover the expansion. ABN Amro, BNP Paribas, DNB NOR ASA, Nordea Bank AB and SEB AB were the underwriters.
The announcement is about half of the 3 billion euros (US$4.66 billion) the company expects to spend in Singapore to reach an estimated capacity of 1.5 gigawatts, Evensen said.
“The announcement was long-awaited,” he said. The company had said it would make an announcement related to its investment in Singapore sometime in the second quarter.
“Volumes were a little higher than expected,” Evensen said.
Based on the expansion, REC should be producing about 2,400 megawatts of wafers, 780 wafers of cells and 740 megawatts of modules in 2012, CEO Thorsen said.
“There is still significant space for further expansion at this site,” he told investors. The investment decision for the next phase is expected next year.
REC, whose costs for producing cells and modules are around the industry average, said it sees costs for cells made in Singapore at about 45 percent below the industry average and modules at about 35 percent less than the average.
The company will also invest up to 400 million kroner to upgrade production capacity at Heroya, Norway, by about 100 megawatts, the company said in a separate statement yesterday. Construction is expected to start toward the end of the third quarter and additional capacity will be added by the end of next year, it said.
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