Download - First Solar FDI in Brazil
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Foreign Direct InvestmentBRAZIL
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99% reduction in high‐cost semiconductor material
Fully integrated, continuous processvs. batch processing
Large (2’x4’) substrate vs. 6” wafers
No shortages of semiconductor material
Polysilicon Ingot Wafer Solar ModulesSolar Cell
Breakthrough Thin Film Process Technology
Conventional Crystalline Silicon Batch Technology
Superior Technology
Glass In 2.5 Hours Module Out
Semiconductor Deposition
CellDefinition
Final Assembly& Test
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Systems EPC BusinessTarget Applications
Ground Mounted Systems Typically Multi-MW
Commercial Roof Mounted SystemsTypically 100kW to 1MW+
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Investment Structure
FDI B
reakdo
wn 70 MW Manufacturing
Plant with Scalable potential to 250 MW
Technology Research Center
100 MW Power Plant
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Investment Financial Structure
• Bioenergy Development Costs ‐ $30 M
• PV Factory $60 M ‐ Cash
• Research center $10 M ‐ grant funded
• Power Plant $250 M ‐ 10 % Cash and 90% Debt
0%
20%
40%
60%
80%
100%
Cost Structure
Financing Breakdown
Cash Grant Debt
0
50
100
150
200
250
Factory Research Center
Power Plant Development Cost
$ Million
Expenditures
Expenditures
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Investment Cash Flow
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Investment Cash Flow
‐120.0
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‐60.0
‐40.0
‐20.0
0.0
20.0
40.0
$M
/ Y
ear
Year
FDI Cashflow
Annual Cashflow
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First Solar Global Presence
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Why Brazil?
• Number 5 destination for Foreign Direct Investment• Emerging middle class• Median Population Age 28.9 years old• Moody’s and Standard & Poors graded Brazil as “safe investment that is unlikely to falter”
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Geographical Opportunity
12
3
45
6
7 8910
• Bordered by 10 countries
• Access to other countries by Atlantic ports
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Government Overview
Considerations
• Red tape, corruption and “Brazil’s Cost”
• Ranks 127th among 183 countries for ease of doing business (World Bank’s Doing Business Index)
• Complicated and Expansive Labor Laws – add another 70% to employee compensation
Drivers• Two Bills in Senate aimed at
giving tax break for solar energy
• 80% discount on taxes paid for distributing electricity from large solar systems
• Successful track record of government intervention and change in energy sector
• Global Spotlight on infrastructure improvements –World Cup and Olympic Games
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Solar Irradiation
• Brazil’s solar potential is bright• High Annual Solar Irradiation of 1500 to 2500 kWh/m2
• Compared to Germany, solar panels in Brazil’s worst region produces 20% more than Germany’s best region
• Best area is Northeastern Brazil which has highest average levels of irradiation (2350 kWh/m2)
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FDI Proposal
FDI B
reakdo
wn 70 MW Manufacturing
Plant with Scalable potential to 250 MW
Technology Research Center
100 MW Power Plant
$60 M
$10 M
$250 M
$30 M
Total Investment$350
Forecasted15% IRR
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Questions?