Sharp, Enel To Invest $1.6 Bln In Solar Venture: Media

Date: 28-Nov-08

Country: JAPAN

TOKYO - Japan's Sharp Corp, Italy's Enel SpA and a European machine maker will invest about 150 billion yen (US$1.6 billion) in an Italian solar cell venture, local media said, as the sector continues to ramp up even as the global economy worsens.

Sharp, the world's No.2 maker of solar cells, will hold a minority stake in the venture, while Enel, Italy's largest power company, and a third machine maker will together hold a majority stake, the Nikkei business daily said on Thursday, pushing up Sharp's share price as much as 8.4 percent.

Sharp is stepping up investment in an effort to retake market share from No.1 solar cell maker Q-Cells of Germany, whose aggressive capex plans outstrip those of its rivals.

Sharp and Enel plan to build a thin-film solar cell plant, aiming for initial output of 480 megawatts by the summer of 2010, and ultimately raise output to 1,000 megawatts to meet demand for renewable energy sources, the paper said.

Capex at Sharp, which also plans a 72 billion yen solar plant in Japan with an initial output of 480 megawatts by March 2010, still lags behind Q-Cells, which has said it plans to raise capacity to 1,000 megawatts in 2009 and 2,500 megawatts in 2010.

Miyuki Nakayama, a spokeswoman for Sharp, said the two companies have been in talks on the alliance but would not comment on details such as the size of the investment. She said details would be announced at a briefing at 0600 GMT on Thursday.

The top solar power firms are hurrying to expand capacity even as the sector smarts from a worsening global economy, which is drying up financing for new ventures and forcing smaller solar power firms to push back investment.

No.3 solar cell maker China's Suntech Power Holdings Co cut its sales forecast last week.

Shares of Sharp were up at 7.3 percent to 661 yen by 0107 GMT, outperforming the Tokyo bourse's electrical machinery index, which rose 1.5 percent.

(US$1=95.57 Yen)

(Reporting by Mayumi Negishi and Nathan Layne; Editing by Michael Watson)

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