Canadian Solar

completed

Founded in 2001 and listed on the NASDAQ since 2006, Canadian Solar (“Canadian Solar”, the “group” or “company”) is one of the world’s largest photovoltaic (“PV”) solar module suppliers and a vertically integrated manufacturer including flexible manufacturing capacities with downstream businesses from ingot, to wafer to cell to module products. Headquartered in Guelph, Ontario/Canada, the company’s two main lines of business are: (i) the manufacturing and sale of solar PV modules (55.5% of Canadian Solar’s total net revenues in FY2014); and (ii) the development, construction and sale of solar PV projects, working with both build-to-sell and build-to-hold business models. Currently the main manufacturing activities of the company are in China (85% of total capacity) and Canada. Solar PV models are produced at three major module manufacturing facilities located in Guelph, Ontario/Canada, Luoyang (Henan Province) and Changshu (Jiangsu Province), China. All modules manufactured in 2015 have a total capacity of 3,800 MWp when operational in peak conditions (accumulated peak capacity). The manufacturing plants located in Suzhou (Jiangsu Province) and a newly established facility in Funing, China produce cells with 2,300 MWp peak capacity (as produced in 2015). The ingots/wafers manufacturing plant located in Luoyang annually produces wafers with 400 MWp peak capacity.In order to meet the expected strong growth in global demand for solar modules the company is increasing its manufacturing capacity with plans to expand its wafer, cell and module capacities to 1.0 GWp, 3.4 GWp and 5.63 GWp respectively by December 31, 2016. The company''s wafer manufacturing capacity at its Luoyang plant is expected to reach 1.0 GWp by June of 2016 and the company''s cell manufacturing capacity at its Funing plant is expected to reach 1.0 GWp by July of 2016. In addition, a new 400 MWp cell manufacturing plant is expected to be commissioned in the second half of 2016 in a location still to be defined. The company''s planned module manufacturing capacity by the end of 2016 includes 3.0 GW in Changshu, and 1.1 GW in Luoyang, while approximately 1.53 GW will be at existing and new locations outside China, including Canada, Vietnam, Indonesia, potentially Brazil and other emerging markets.The plant referred to above in Funing was built by a joint venture between Canadian Solar with GCL-Poly, one of the largest manufacturers of polysilicon and wafers based in Jiangsu, China. The company also has ongoing partnership agreements for module assembly with various original equipment manufacturers (“OEMs”) in South East Asia and is targeting new manufacturing plants in different regions to serve local markets, which could potentially include Brazil. A new module manufacturing facility is being established currently in the Vietnam Singapore Industrial Park, Hai Phong, Vietnam.Canadian Solar has built a significant track record as a project company and has diversified into other markets by building and connecting more than 1.74 GWp of projects (ncluding projects developed and connected by its wholly owned subsidiary, Recurrent Energy, a solar energy developer in North America) either as an engineering, procurement and construction (“EPC”) contractor, or project developer. As of November 2015 the company had secured a late stage pipeline of 2.5 GWp of projects located in Japan, China, Canada, Brazil, United States and the United Kingdom. The investment in which IFC will participate (“the project”) involves: (i) purchase of up to $10 million of shares in the company; and (ii) loans of up to $40 million for IFC’s own account and $20 million as part of the Managed Co-Lending Portfolio Program. The proceeds of the equity and loans will be directed towards the manufacturing facility in Vietnam and those to be potentially constructed in Brazil as well as general corporate finance purposes related to manufacturing operations in emerging markets.