REC ASA - Secures a NOK 2.9 billion silicon powder contract

Sandvika, October 20, 2008. REC has entered into a long-term take-or-pay agreement for the supply of fine particulate silicon - or "silicon powder" - from the FBR-process. The contract has a value in excess of USD 500 million (~NOK 2.9 billion).  
 
REC has entered into a long-term take-or-pay agreement with a PV-company based in Asia for the supply of fine particulate silicon from the FBR-process, so-called "silicon powder". Silicon powder has traditionally had low or negative value, due to storage and land-filling requirements. REC has developed technology to capture and package these fine silicon materials, which opens valuable commercial opportunities.
 
"This will enable us to increase the revenue and consequently the financial return on our latest polysilicon expansions, through the marketing of a product that REC presently does not intent to utilize internally", says Erik Thorsen, President & CEO of REC.
 
The contract has a value in excess of USD 500 million (~NOK 2.9 billion), and runs for seven years from 2009 through 2015. Prices and volumes are predetermined for the entire contract period, including clauses covering annual price adjustments in the case of cost escalations. Volumes delivered will start at a relatively low level and increase over time to approximately 1,500 MT per year. According to the agreement, REC Silicon will receive a prepayment fee of USD 65 million (~NOK 380 million) before the end of 2008. These "silicon powder"- volumes come in addition to already communicated volumes of prime material (i.e. FBR and Siemens prime).
 
For more information, please contact;
Erik Thorsen, President & CEO; +47 907 56 685
Jon Andre L√łkke, SVP & IRO; +47 907 44 949
 
 
About REC
REC is uniquely positioned as one of the most integrated companies in the solar energy industry. REC Silicon and REC Wafer are the world's largest producers of polysilicon and wafers for solar applications. REC Solar produces solar cells and solar modules and engage in project development activities in selected segments of the PV market. REC Group had revenues in 2007 of NOK 6,642 million and an operating profit of NOK 2,588 million. Please also see www.recgroup.com.