Ascent Solar Technologies has signed a definitive agreement to form a joint venture with the Government of the Municipal City of Suqian in Jiangsu Province, China.
Under this agreement, Suqian will provide cash of approximately $32.5 million as well as five year rent-free use of approximately 331,000 square feet of factory and office space in the Suqian Economic and Industrial Development Science Park.
The JV will build a 100MW factory over six years to manufacture Ascent’s proprietary thin-film Copper-Indium-Gallium-Selenium (CIGS) photovoltaic modules on flexible polyimide in addition to related consumer products.
Ascent shall purchase the factory within 5 years at the initial construction cost, and will also hold the right to purchase Suqian’s ownership interest in the JV after 5 years at 1.5 times of Suqian’s cash cost.
In the initial phase of the project, Ascent and Suqian will form a JV in which Suqian will inject approximately $4.8 million in cash and have majority interest of 75 percent.
Ascent shall inject approximately $1.6 million in cash and hold a minority interest of 25 percent. Subsequently, during 2014 Suqian will further inject the balance of the committed $32.5 million while Ascent will contribute its proprietary technology and intellectual property, as well as certain equipment from its Colorado facility, thereby increasing its shareholdings progressively up to 80 percent ownership.
By the first quarter of 2016, the JV is expected to operate an end-to-end manufacturing plant of 25 megawatts capacity and related consumer products.
Suqian will also provide a package of additional incentives including a 5-year corporate tax holiday and a further 50 percent tax rebate over the next 5 years, full rebate of value-added tax for the first 2 years and 50 percent rebate for the subsequent 3 years, and free accommodations for up to 3 years for key scientists, engineers and management personnel of the JV.
As Phase two of this program is implemented, Ascent will have the option to purchase approximately 215,000 square feet of land zoned for commercial usage at a favorable price at 10 percent above the government’s prevailing cost, which may generate income for Ascent.
Recently Ascent Solar announced it will launch new EnerPlex products including Surfr battery and solar case for the iPhone 5 and 5s as well as additional solar products and charging accessories, at CES 2014 in Las Vegas.