Six years after President Obama hailed a Spanish company for its clean-energy projects and work in using solar technology to supply electricity, the company is in big financial trouble after coming to the U.S and building two American plants.
President Obama called it “good news” in 2010 that his administration had “attracted a company to our shores to build a plant and create jobs right here in America.” Now Abengoa, considered a world leader in the technology known as solar thermal has amassed huge debt from its expansion to the U.S. It has nearly $2 billion in outstanding loans that were guaranteed by the U.S. government. The company also received big subsidies in Spain but as the New York Times pointed out in an article this week, solar thermal projects are slow to turn a profit and generate little income.
Some suggest if it fails, it would be the largest bankruptcy in Spanish corporate history. But creditors are already taking Abengoa to court after it built two plants in Arizona and California and supplied electricity to more than 160,000 homes.
If it sounds familiar, it could be an echo of another disastrous renewable energy project that involved federal government funds and politics.
It raises memories of Solyndra, the solar company that received huge sums of money from the U.S. government then went belly up. Yes, that Solyndra, the company that involved Tulsa billionaire oilman and banker George Kaiser and his Argonaut Ventures Investment fund which owned nearly 36 percent of the company. The collapse of Solyndra led to a Department of Energy report from its Inspector General which said Solyndra misrepresented facts in order to obtain a $535 million loan guarantee from the federal government. The report accused Solyndra of lying and failing to make complete, accurate and direct disclosure. Solyndra claimed to have $1.4 billion in sales contract commitments when it really didn’t. The misrepresentations, according to the IG report, led to a false rating by Fitch Ratings, Inc. which gave Solyndra’s project a BB-credit rating. Fitch later indicated had it known the real story, the credit rating would have been lower.
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