SunPower speeds up wafer project

Sunpower Philippines Manufacturing Ltd. (SunPower), a US-based company manufacturing solar cells for worldwide distribution, has decided to accelerate is plan to establish a $300-million wafer fabricating facility in the Philippines.

SunPower has approached the Philippine Export-Import Credit Agency (PhilEXIM) for a 100-percent guarantee for a dollar-denominated loan amounting to $200 million.

The guarantee request represents roughly 68 percent of total project cost while the remaining 32 percent will be covered by equity infusion.

The entire project cost is closer to $300 million. Cypress Manufaturing Ltd., the local subsidiary of Cypress Semiconductor Corp. of the USA., will make an additional $7.9-million equity investment.

The site will likely be located at the former NEC plant in Laguna Technopark, which was acquired by Cypress from the Japanese electronic company.

The amount will be used to finance the construction and commissioning of a wafer fabrication facility. The first phase of the program calls for the erection of the facility, which will make solar cells using imported ingots.

At least $38 million will be needed immediately for the first phase but these may move up to almost $50 million with the planned acceleration.

Solar power through photovoltaics (PV) is one of the most promising alternative energy sources. It offers not only business opportunities for the local manufacturing industry but national savings amounting to billions of dollars as well.

According to SunPower, the proposed 150-megawatt manufactured capacity plant when fully operational, would make the Philippines "the PV capital of the world." It will create new jobs and result in larger dollar revenue streams for the Philippines.

It also means the gradual replacement of fossil fuel as source of electricity.

PhilEXIM is a government financial institution (GFI) directly under the Department of Finance (DOF), and its primary purpose is to extend sovereign guarantees to SMEs as well as selected sectors of the business society for foreign or domestic loans.

The direct loans are under the agency’s direct lending program primarily to business groups, exporters, small and medium enterprises (SMEs), traders and importers. It can extend guarantees up to 15 times its subscribed capital stock of P10 billion. And its guarantee ceiling is not tied up to the sovereign guarantees of the National Government.

Foreign investment banks and official development agencies often require sovereign guarantees when Philippine businesses apply for huge loans. "We are a sovereign guarantee shop," Valdes added.