This will lead to the establishment of an FCvelocity-9SSL fuel cell stack production operation in the City of Yunfu, in Guangdong Province. Fuel cell stacks will be packaged into locally-assembled fuel cell engines and integrated with zero-emission buses and commercial vehicles within China.
Subject to closing, the transaction has a contemplated minimum value to Ballard of US$168m over a five year period and includes a number of key elements. Inter alia, Ballard will receive US$18.4m in technology solutions revenue for technology transfer services, production equipment specification and procurement services, training and commissioning support in relation to the establishment of a production line in Yunfu: most of this revenue is expected to be recognised in 2017. At the close of the transaction, which is expected to occur later this year, a joint venture will be created to undertake the stack manufacturing operation. This will be 90% owned by Synergy, with Ballard taking the remaining 10%.
On commissioning of the operation, which should be next year, Ballard will become the exclusive supplier of membrane electrode assemblies for each fuel cell stack manufactured by the joint venture, with minimum annual MEA volume commitments on a “take or pay” basis, totalling in excess of US$150m over the initial five year term.
