According to a statement released, the facility, located in Suzhou will be "dedicated to Canadian Solar's requirements". It adds that the first phase of the project will see around USD $77 million in total capital expenditure.
Under the terms of the agreement, GCL will reportedly contribute 90 percent of the registered equity, while Canadian Solar will contribute the remaining 10 percent. Meanwhile, 33 percent is expected to be financed through the registered capital and 66.7 percent through debt.
It is unclear when construction will commence, or when the facility will begin production.
Shawn Qu, chairman and CEO of Canadian Solar did, however, say: "This joint-venture will supplement our other wafer arrangements and make Canadian Solar fully prepared to compete at two GW scale by early 2012.
"We expect this venture to help further lower our manufacturing costs from the first quarter of 2012 onwards, and further improve Canadian Solar's gross margins, with a minimal capital expenditure requirement."
In terms of other projects, Canadian Solar says it remains on track to expand its annualized capacity for solar cells to between 1.3 GW and 1.4 GW by mid-year.
The company adds that it also plans to announce another joint venture, with an as of yet unnamed partner, under which a 600 MW solar cell facility will be established. This, it says, will enable it to reach approximately two GW of internal solar cell capacity during the first quarter of 2012.
Furthermore, it says that its goal of reaching two GW of annualized capacity for module lamination by mid-year is also on track.
In terms of Canadian Solars internal cell and module capacities – 220 MW and 350 MW for the second quarter of 2011, respectively – are said to be currently running at full utilization rates.
Meanwhile, the company says the percentage of third-party cells versus internally produced cells in the second quarter of 2011 is expected to be higher than that in the first quarter of the year "due to the full utilization of the company's module capacity".
The statement continued: "However, the company still expects to maintain a similar or improved blended gross margin in the second quarter of 2011 compared to the first quarter of 2011 based on its trend forecast for third party cell and wafer prices."
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