Solar Manufacturing Plant Slated for Singapore

Singapore is set to launch its first solar panel manufacturing plant using Thin-Film Amorphous Silicon Technology in the fourth quarter of this year – making it the first country in this region to operate one. The planned facility is expected to have an annual capacity of 60 megawatts (MW) and employ 200 high-tech skilled operators and engineers once fully operational.

SGX Sesdaq-listed Equation Corp Limited (“Equation”) through its newly-acquired subsidiary Solar Morph Pte. Ltd. (“SolarMorph”), a Singapore-registered company will undertake the construction and operation of the plant in Singapore, commencing with establishing a 20MW manufacturing line by mid-2008 and continue to expand to its full 60MW annual capacity by 2010.

“Thin-film technology is most successful in achieving low manufacturing costs in the long run and will be the technology that will enable solar energy prices to reach grid parity, in similar pattern of Moore’s Law of transistor capacity doubling every 18 months. What you will see then is the explosive application of thin-film solar that will drive the demand growth for solar energy,” said Eddie Chng, the Executive Chairman of Equation, who will be the Chairman of SolarMorph.

The initial 20MW plant will require S$120M to build. SolarMorph intends to fund the plant with S$60M in equity and the remaining through debt financing. To-date, SolarMorph has completed its first round of fund-raising – obtaining investments and commitments for S$16 million in funds, led by Tembusu Ventures through its affiliated fund, Tembusu Capital.

Under its investment agreement with SolarMorph, Equation Corp will take an initial stake representing 69.6% of the voting rights in SolarMorph with an initial investment of S$15.5 million. Equation Corp will be issuing convertible bonds which are partially convertible into shares in Equation at the conversion price of S$0.355 to partially fund this initial investment. Equation may inject further investments in SolarMorph up to an aggregate of S$48 million. Equation will further assist to raise S$90 million in debt financing for SolarMorph.

Groundbreaking of the plant is scheduled to take place in fourth quarter of 2007.Production is scheduled to start in July 2008 and will be ramped up to full capacity by early 2009. SolarMorph has already secured a three-year off-take agreement worth US$120 million.
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