MUMBAI: Moser Baer India’s subsidiary Moser Baer Photo Voltaic (MBPV) and Norway’s REC Group have signed a definitive contract for sale and delivery of high quality multicrystalline silicon wafers by REC to MBPV over an eight-year period beginning from 2008.

MBPV CEO Ravi Khanna said, “We greatly value the technical, managerial and operation capabilities of REC and we believe that this strategic sourcing deal is a win-win situation for both sides. It will provide a long term customer for REC and an assured supply of high grade silicon, wafers to MBPV.”

Globally, given the rapid growth of the photovoltaic industry, there is a shortage of silicon wafers, a key raw material for the photovoltaic industry. While the demand continues unabated, the supply is expected to remain tight in the near to medium term.

An assured supply of silicon wafer will provide a significant competitive advantage to MBPV in the current industry scenario.

The contract follows MBPV’s strategic sourcing initiative with Deutsche Solar and its acquisition of a 40 per cent strategic equity stake in the Slovenia-based Solarvalue Proizvodnja d.d. which plans to set up a capacity of 4,400 tonnes of solar grade silicon by end 2008. The three pronged strategy is part of our objectives to access a regular supply of high quality solar grade silicon at competitive pricing.

The REC contract is structured as a take-and-pay contract with a reducing price trend on an annual basis with a cumulative potential value of approximately $ 880 million. The delivery of wafers under the new contract is expected from 2008 and continuing over an eight-year period from the first shipment. The contract assures a regular supply of silicon wafers in the medium to long term and also ensures that the company benefits from any increased efficiencies in the silicon wafer market in the future.