News

# A-Power Announces License Agreement To Produce & Sell Fuhrlander’s 2.5MW Wind Turbine

January 28, 2008 by Jeff Shepard

A-Power Energy Generation Systems Ltd. announced that its Chinese operating subsidiary, Liaoning GaoKe Energy Group ("GaoKe"), has entered into a license agreement with Fuhrlander AG of Germany that gives GaoKe the right to produce and sell Fuhrlander’s 2.5MW series wind turbine in China.

As part of the agreement, Fuhrlander will assist GaoKe in developing a production plant under construction in Shenyang that emulates Fuhrlander’s plant in Germany, with completion expected in mid-2008. Fuhrlander will also work closely with GaoKe to ensure that the wind turbines are produced to specifications. Under the technology license, GaoKe has the right to any advancements or improvements that Fuhrlander makes to its 2.5MW series wind turbine without charge.

To secure these rights, GaoKe has agreed to pay Fuhrlander approximately $13.9 million (which covers the license, training and a fixed royalty). Fuhrlander will also receive a minority percentage of the gross profit generated from the sale of the first 100 wind turbine units manufactured by GaoKe. The sales price of the 2.5MW wind turbine is expected to be RMB 20 to 24 million ($2.7 to \$3.2 million) with 8 to 12% gross margins. GaoKe will have the capacity to produce a maximum of 300 of the 2.5MW wind turbines on an annual basis after the first phase of its wind production facility is completed later this year.

Jinxing Lu, A-Power’s Chairman and CEO, commented, "We are very excited to become Fuhrlander’s partner in China. Fuhrlander is a highly respected wind turbine developer in Germany, and it has been supplying state-of-the-art turbines to the global markets for over 20 years. Its 2.5 MW wind turbine is one of the largest commercialized land-based wind turbines in the world, and we expect that it will play a major role in filling the substantial demand in China’s growing green energy market."