62689 LONG-TERM PARTNERSHIPS WITH EMERGING PLAYERS The Philippines: SunPower Expansion Moves Solar Industry Closer to Grid Parity The Philippines, as an archipelago with abundant sunshine, is an ideal location to benefit from solar energy to make renewable power available to the country’s citizens who live across its many islands. With an educated, low-cost workforce, it is also an ideal location to manufacture the equipment needed to make the solar cells and modules needed to capture solar energy. One leading player in the solar industry, U.S. based SunPower Corporation, was attracted to this strong combination of assets as it looked to expand production of its high-efficiency solar cells. IFC is supporting the company’s two solar cell and module fabrication facilities outside of Manila through a $75 million loan. At the end of 2009, SunPower’s Philippine operations employed 4,390 people. Company sources say that IFC’s financing was critical at a time when sources of funding for alternative energy projects have dried up due to the lingering effects of the global financial crisis. “We have been working closely with IFC for more than a year to secure this financing, and we hope to identify additional opportunities in the future,” says Dennis Arriola, SunPower’s executive vice president and CFO. According to alternative energy experts, sunny climates and island nations (which often need to ship in diesel to generate power in remote locations) like the Philippines have the strongest potential for achieving “grid parity”— bringing down the cost of solar energy so that it is comparable to traditional fossil fuel-based sources of electricity, making it a more viable option for consumers. IFC is focused on enabling grid parity in emerging markets as a way to expand access to electricity for the millions of people who remain in the dark, and as a way to mitigate the effects of climate change. In fact, investing in the solar photovoltaic supply chain is a critical part of IFC’s climate change strategy, as solar energy is a reliable source of carbon-free electricity that can be used in grid- connected and off-grid applications. IFC Role and Additionality • $75 million long-term loan: IFC’s support sends a strong, positive signal to the market about the viability of renewable energy financing in emerging markets • Reducing greenhouse gasses: Use of modules produced will result in avoidance of an estimated 1.5 million tons of CO2 emissions per annum • Expanding the solar industry: Increased availability of high-performance and cost-effective solar cells will help the industry reach grid parity to make it competitive with conventional energy sources without government subsidy • Sustaining jobs and new economic opportunity: Over 4,000 skilled jobs, plus additional employment through increased demand for complementary supply and support services For more information about IFC’s financial products and advisory services in the renewables sector, please contact: Stephanie J. Miller 1-202-458-5815 sjmiller@ifc.org or Nina Zegger 1-202-473-0739 nzegger@ifc.org Printed on material that meets international environmental standards and is from sustainably managed commercial forests ifc.org 2011