Alternative Energy wins EPC job for USD-600m Indonesian solar park

Oct 5, 2012 - Singaporean green energy company Alternative Energy Ltd (LON:ALR) yesterday disclosed it had agreed to be the exclusive engineering, procurement and construction (EPC) contractor for a planned USD-600-million (EUR 461.3m) solar project in Indonesia.

The binding heads of agreement, signed in July with Indonesian project developer P.T Mega Urip Pesona (MUP) and Chinese photovoltaic (PV) product maker LDK Solar Co Ltd (NYSE:LDK), is subject to government approval and the signing of a definitive master project agreement.

Under the agreement, MUP will develop the Indonesian 1,000 Island project for the construction of solar plants across the country and will arrange funding for the project. LDK will be the exclusive supplier of solar panels. MUP will secure a soft loan from the Chinese government with a first tranche of up to USD 100 million for the project.

Alternative Energy, which makes roof-based solar and wind energy systems and energy saving technologies, has also agreed to grant MUP an option to buy up to 29.9% of its stock at USD 0.005 apiece for six months from signing of the master project agreement. The Singaporean firm will also pay MUP USD 1 million in reimbursement of preliminary project and feasibility costs. Besides, MUP has agreed to be Alternative Energy's sole distributor in Indonesia, except for its lighting products, and will exclusively appoint the company as EPC contractor for its future projects in Indonesia.

Alternative Energy added that at the end of August, it had agreed to issue shares in a private placement to LDK Solar at 25% discount to the closing market price of the shares on close of business on the issue date in a bid to secure financing for its obligations under the 1,000 Island project.

(USD 1 = EUR 0.769)

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