Canadian Solar subsidiary CSI Solar has entered into an investment agreement with the municipal government of Hohhot, in Inner Mongolia, China, for expanding with a Capex of $1.6 billion.

CSI Solar said the initial phase of the investment includes 20 GW of ingot, 40 GW of crucible, 10 GW of wafer, 10 GW of cell, 5 GW of module and 5 GW of ancillary products manufacturing capacities. The ingot capacity is expected to commence production in March 2024, and the remaining capacities are expected to start production in the second half of 2024.

Total capital expenditures for the initial phase of this investment is expected to be around RMB11.5 billion (approximately US$1.6 billion), most of which will occur in 2024.

“Inner Mongolia has plenty of wind and solar resources and the local renewable energy penetration is increasing steadily, helping us reduce the carbon footprint of our supply chain. In addition, Inner Mongolia has abundant supply of power, polysilicon, and quartzite,” Shawn Qu, Chairman and CEO of Canadian Solar, said.

Canadian Solar’s previously announced polysilicon investment in Qinghai, China, has not launched as planned due to changes related to local power supply.