This agreement follows the Memorandum of Understanding signed in May 2008 by Enel Green Power and Sharp in a view to set up solar power plants across Italy. Sharp was then trying to expand its clean energy business and reduce production costs.

ST has joined this strategic partnership.

The initial production capacity is set at 160 MW per year and is expected to grow to 480 MW per year over the next years, partners said. PV panel manufacturing at the Catania plant is due to start at the beginning of 2011.

Partners specified that the factory output will be used to serve the solar markets in the EMEA (Europe, Middle East and Africa) region, especially in the Mediterranean area.

The project of 160 MW requires a total investment of 320 million euros ($457 million) and will be funded by equity, state grants and project financing with no recourse to the joint venture's shareholders beyond their quota in the joint venture.

Each partner said it has agreed to subscribe one third of the equity, representing a contribution up to 70 million euros ($100.1 million) each, either in cash or in-kind. It will then hold one third of the shares in the new joint venture company.

In parallel, Enel Green Power and Sharp said they have formed a joint venture to develop solar farms focusing on the Mediterranean area. The purpose of the agreement is to install cumulative capacity at a level of 500 MW by the end of 2016.

By: DocMemory
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