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(Reuters) - Canadian Solar Inc said it will buy majority stake in 16 power projects from SkyPower Ltd for about C$185 million ($184.7 million) as part of its plan to concentrate on smaller utility-scale projects.
The 190-200 megawatt projects, each of which has a 20-year power purchase contract from the Ontario Power Authority, will generate more than C$800 million in revenue for Canadian Solar, the company said in a statement on Tuesday.
Ontario-based Canadian Solar, which on Monday denied reports that China National Offshore Oil Co Ltd was negotiating to buy the solar panel maker, already runs manufacturing facilities in Canada's most populous province that gives generous subsidies to clean energy.
"The actual project sizes are directly aligned with our strategy of concentrating on smaller utility scale projects that individually are less risky to finance and execute on," Chief Executive Shawn Qu said in a statement.
He added that the deal supports the company's goal of generating 40 percent of its revenue from solar power plants and related system solutions next year.
Large utility-scale solar projects, which produce power for the wholesale electricity market, result in better margins than small roof-top installations. However, as clean-energy financing dries up, companies are gravitating toward easy-to-fund small projects.
Canadian Solar said construction on the SkyPower projects are expected to start next year.
The companies will also form a joint venture to build solar plants in emerging markets. This is expected to start generating revenue within the next two to three years, Canadian Solar said.
Reporting by Ranjita Ganesan and Krishna N. Das in Bangalore; Editing by Hans-Juergen Peters, Roshni Menon