(Yicai Global) Aug. 29 -- China's Hengdian Group DMEGC Magnetics will cooperate with a Spanish unit of Sunstroom Engineering to apply for a guarantee that proves the latter's ability to pay for a solar energy project in Spain.

DMEGC will apply for a bank's letter of guarantee on behalf of Sunstroom and its affiliated project companies that will build a solar plant with a total power of no more than 200 megawatts, covering a maximum value of EUR2 million (USD2.3 million), the Dongyang-based magnet maker said in a statement. The letter of guarantee is valid for a maximum of 5 years after the agreed date and separate such documents may be issued for different projects.

According to the laws of the southern European country, a solar photovoltaic project developer should provide a local energy authority with a lender's letter of guarantee to apply for grid connection. The necessary sum is calculated at a rate of EUR10 per kilowatt (USD11.7/kW) and the energy authority can cancel the financial solvency warrant only after consulting the project developer.

Founded in 2006, Sunstroom is a Dutch engineering firm that specializes in renewable energy plants.

Editor: Emmi Laine