GCL-Poly Signs Letter Of Intent With China Merchants New Energy

GCL-Poly Energy announced that, GCL-Poly Investment Limited and China Technology Development Group Corporation ("China Technology") signed a strategic cooperative letter of intent ("LOI") to  collaborate on the investment, development and construction of PV power projects in the  PRC and abroad based on each party's comparative advantages. Both China Merchants  New Energy and China Technology are subsidiaries of China Merchants New Energy  Group Limited.

Pursuant to the LOI, GCL-Poly will continue to develop high-quality solar PV power  projects, including ground-mounted solar plants, distributed PV stations and "Golden  Sun" roof-top projects of no less than 973MW in the next three years during the period of  2013-2015. The preliminary plan is to develop 200MW in 2013, 300MW in 2014, 473MW in 2015 respectively, in regions such as, but not limited to, the Northwest, East and North China. The LOI also states that the above-mentioned projects will be financed and  owned by China Merchants New Energy, and GCL-Poly is mainly responsible for the  EPC and obtaining lands and electricity tariffs approvals, China Technology will be  entrusted to facilitate matters in relation to the acquisitions of projects. After negotiation, GCL-Poly and China Merchants New Energy agreed that the acquisition of the shares of  GCL-Poly's projects will be based on an IRR hurdle rate set by China Merchants New  Energy. In addition, GCL-Poly agreed to gradually transfer the equity interests in its US  solar plant assets to China Merchants New Energy and to jointly develop new PV  projects overseas. 

Mr Zhu Gongshan, Chairman of GCL-Poly said, "We are very pleased to cooperate with  China Merchants Group, a large state-owned enterprise to establish the best and the  most professional operating platform for the solar business in China. Being the world's leading polysilicon and wafer manufacturer, GCL-Poly does not only possess leading cost advantage in manufacturing but also is very experienced in PV projects  development and EPC execution. As such, we are well positioned in both the project  applications and approvals for the "Golden Sun" solar subsidy program based on our  unique resource advantages. By cooperating with our strong strategic partners, we  believe that the Group will be able to further increase the market demand for our polysilicon and wafer products and at the same time to push forward our downstream  solar farm business development. Through this cooperation, we expect to further expand  our system integration and PV rooftop solar power system business to the high potential  China and US solar markets"