Moser Baer Photo Voltaic in $880 million sourcing deal with Norway''s REC Group

27 July 2007

The Norway-based REC Group has signed an eight-year agreement to supply high quality multicrystalline silicon wafers to Moser Baer Photo Voltaic Ltd (MBPV), a subsidiary of Moser Baer India Ltd. The value of the contract is Rs880 million.

The REC contract is structured as a take-and-pay contract with a reducing price trend on an annual basis. The delivery of wafers under will commence from 2008 for the next eight years from the date of the first shipment.

The contract would assure a regular supply of silicon wafers in the medium to long term and would also ensure that MBPV benefits from any increased efficiencies in the silicon wafer market in the future.

According to Ravi Khanna, CEO, MBPV, "We greatly value the technical, managerial and operation capabilities of REC and we believe that this strategic sourcing deal is a win-win situation for both sides. It will provide a long-term customer for REC and an assured supply of high grade silicon, wafers to MBPV."

The contract follows MBPV''s strategic sourcing initiative with Deutsche Solar and its acquisition of a 40-per cent strategic equity stake in the Slovenia-based Solarvalue Proizvodnja d.d., which plans to set up a capacity of 4,400 tonnes of solar grade silicon by end 2008. This three-pronged strategy to secure its future supplies is part of MBPV''s objectives to ensure availability of regular supplies of high quality solar grade silicon at competitive prices.

Globally, given the rapid growth of the photovoltaic industry, there is a shortage of silicon wafers, a key raw material for the photovoltaic industry. While the demand continues unabated, the supply is expected to remain tight in the near to medium term. An assured supply of silicon wafer will provide a significant competitive advantage to MBPV in the current industry scenario.