Canadian Solar (NASDAQ: CSIQ) ("CSI") has signed a new distribution and sales agreement with Amur Energy Division ("AED") of Spain. The contract is expected to have an estimated value of approximately $40 million to $50 million in 2007.

CSI has already commenced delivery of crystalline photovoltaic panels to AED.

"This agreement comes at the right moment to take advantage of the consolidation of the Spanish solar power market, and will allow CSI's products to gain a leading position in the Spanish sales of solar modules," said Jesus Linares Gil, Chairman and CEO of AED.

"We view this announcement positively, as it further diversifies CSIQ's revenue away from the highly competitive German market," said Jeff Osborne, analyst with CIBC World Markets. In 1H06, Germany represented 76% of CSIQ's revenue, while Spain was only 17% of revenue.

"We believe sales and distribution agreements in Spain have better economics than those in Germany.  The German market has experienced a recent slowdown in demand, which has resulted in greater pricing pressure on module manufacturers and lower profitability. We believe the average sales price (ASP) in Spain is higher than in Germany," said Osborne.

Founded in 2001, Canadian Solar is a solar module and related product company, serving customers in various markets worldwide. CSI is incorporated in Canada and conducts all of its manufacturing operations in China.

AED was started in 2004 as the Division for Renewable Energy in the HITEA-AMUR engineering and construction group in Spain, which works in global hydraulic projects for irrigation, agricultural development and city water supply. AED specializes in large solar power plants and has consolidated a good position to provide either photovoltaic modules or "turn key" complete plants.