Morgan Stanley & Distributed Energy Form Joint Venture to Finance Renewable Power Generation Projects

    WALLINGFORD, Conn., March 7 /PRNewswire-FirstCall/ -- Distributed
 Energy Systems Corp. (Nasdaq:   DESC), which creates and delivers products
 and solutions for the decentralized energy marketplace, announced today it
 has entered into a joint venture with Morgan Stanley (NYSE:   MS), a leading
 global financial services firm, to develop and finance power generation
 projects focused on better utilizing today's energy resources.
     The Agreement with Morgan Stanley represents the successful conclusion
 of Distributed Energy Systems' previously-announced goal of attracting a
 financing partner to support and accelerate development of renewable and
 efficiency-enhancing projects in the US. Projects envisioned by the joint
 venture will offer competitive returns for investors while also advancing
 environmental objectives. Primary applications would include
 waste-to-energy, combined-heat-and-power, wind, solar, bio-digestion, fuel
 cell and other renewable technologies. The joint venture will offer full
 project life cycle services including development, financing, engineering,
 procurement, construction, commissioning, operations and services.
     "Teaming with Morgan Stanley lets us step up to a broader array of
 project opportunities," said Ambrose L. Schwallie, Distributed Energy's
 chief executive officer. "Many of the customers we deal with see the merit
 in projects that help them save on the cost of energy while reducing their
 environmental footprint, but the cost of these projects often exceeds their
 capital funding limits. Now, in partnership with Morgan Stanley, we can
 offer a third-party ownership and operations model that creates a win-win
 for end users and investors alike. Another clear benefit of working with
 Morgan Stanley is that our engineering and services business will have a
 chance to win business from their robust franchise in energy projects."
     Morgan Stanley's Managing Director, Aaron Lubowitz, said: "We see a
 large and growing number of investment opportunities in selected
 alternative energy projects. We look forward to creating a mutually
 beneficial business relationship with Distributed Energy Systems."
     Under the terms of the Agreement signed today, Morgan Stanley and
 Distributed Energy will collaborate to develop and own alternative and
 efficiency-enhancing energy projects. Morgan Stanley expects to contribute
 the majority of the capital to meet project financing requirements, with
 Distributed Energy providing the balance. Morgan Stanley will receive
 warrants to purchase up to 10% of Distributed Energy's common shares. The
 majority of those warrants vest immediately, with the remainder vesting
 when the combined investment by the two companies reaches $100 million.
     About Distributed Energy Systems Corp.
     Distributed Energy Systems Corp. (Nasdaq:   DESC) creates and delivers
 products and solutions to the emerging decentralized energy marketplace,
 giving users greater control over their energy cost, quality and
 reliability. The company delivers a combination of practical, ready-today
 energy solutions and the solid business platforms for capitalizing on the
 changing energy landscape. For more information visit
 http://www.distributed-energy.com.
     This press release contains forward-looking statements for purposes of
 the safe harbor provisions under The Private Securities Litigation Reform
 Act of 1995. Statements contained herein concerning Distributed Energy's
 goals, future revenue and profitability, financial sustainability, and
 anticipated growth and other statements that are not statements of
 historical fact may be deemed to be forward-looking information. Without
 limiting the foregoing, words such as "anticipates", "believes", "could",
 "expect", "intend", "may", "might", "should", "will", and "would" and other
 forms of these words or similar words are intended to identify
 forward-looking information. Distributed Energy's actual results may differ
 materially from those indicated by these forward-looking statements as a
 result of various important factors. Distributed Energy disclaims any
 obligation to update these forward-looking statements. Factors that could
 cause results to differ materially from those contained in Distributed
 Energy's forward-looking statements include, but are not limited to, our
 failure to perform contracts for customers profitably, or complete
 development of our products, the failure of our products to achieve
 commercial acceptance, our inability to expand our production facilities,
 manufacture our products at commercially acceptable costs or establish
 distribution relationships, the impact of competitive products, and other
 factors detailed in Distributed Energy's Form 10-Q for the quarter ended
 September 30, 2006, and other filings Distributed Energy may make from time
 to time with the SEC.
 
 

SOURCE Distributed Energy Systems Corp.

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