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Canadian Solar Secures $50M Loan for Solar Plant in Argentina

Canadian Solar Inc. CSIQ recently announced that it has secured $50 million financing for its 100.1-megawatt peak (MWp) solar power project in Cafayate, Salta Province, Argentina. The non-recourse financing package is arranged by CAF — Development Bank of Latin America. The company has a financing target of $75 million with the bank. It is also seeking an additional amount of $25 million in senior financing, which is expected to close in early 2019.

The solar project is currently under construction. It is likely to reach commercial operation in the second quarter of 2019. The company will install 289,800 high efficiency MaxPower CS6U-P 345 W modules and hopes to generate 239,696 megawatt hours (MWh) of electricity per year, which will then be sold to CAMMESA.

International Portfolio: A Boon

Canadian Solar caters to a geographically-diverse global customer base. As of October 2018, Canadian Solar’s solar power plants in operations totaled 340.1 MWp in the United States, 92.9 MWp in Japan, 79.8 MWp in Brazil, 126.1 MWp in India and 462.6 MWp in China.

Courtesy of its ongoing research and development initiatives, the company introduced three of its next generation solar modules at Intersolar Europe held from Jun 20 to Jun 22 in Munich, Germany. The three modules launched are BiKu, HiKu poly and HiDM (High-Density Module).

Such a robust portfolio expansion is likely to boost the company’s revenue generation capability, evident from its nearly 25% top-line improvement in the first nine months of 2018 year over year. Considering the international solar projects coupled with the unveiling of new solar modules, we may anticipate the company to continue with a strong revenue growth momentum in the upcoming quarters as well.

Global Renewable Outlook

Per International Energy Agency (IEA), in the Renewables 2018 forecasts, the share of global renewables energy demand is expected to grow by one-fifth in the next five years to reach 12.4% of the total energy need by 2023. The IEA envisions renewables to witness the fastest growth rate in the electricity sector by providing nearly 30% of total power demand in 2023, up from 24% in 2017.

Other companies operating in renewable space, worth mentioning are Renesola Ltd. SOL, which boasts a global pipeline of approximately 1.65 GW of projects in various stages and SunPower Corp. SPWR, which is fortifying its footprint in the global market with plans to build six solar projects across many regions in Mexico. Additionally, another company in the same arena, JinkoSolar Holding Co. JKS, flaunts multiple global solar projects in its pipeline.

Price Movement

In the past 12 months, shares of Canadian Solar have outperformed the industry. The stock has declined 5%, narrower than the industry’s decrease of 16.7%.


Zacks Rank

Canadian Solar currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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