Insight: Delays dog U.S. government loans to green energy projects
By Ayesha Rascoe and Roberta Rampton
WASHINGTON (Reuters) - A year after the U.S. government raced to meet a deadline to finish loan agreements with dozens of clean energy companies, less than half the total money promised has been handed over.
Technical questions and companies' own failures in hitting contractual milestones are behind some of the holdups.
But government officials fearful of taking a risk on firms that could collapse may have also caused some of the delays. The political firestorm after the failure of Solyndra, a solar panel maker that went bankrupt last year after receiving more than $527 million in a government loan, may have made the authorities wary, industry experts and investors say.
The Energy Department and some companies say the pace of disbursement reflects an appropriately cautious approach to handling taxpayer investment in nascent industries. In some cases, though, the rigid approval process for drawing on loans has frustrated recipients, who feel the government is withholding cash due to minor setbacks.
A Reuters analysis of Treasury Department data on payments to 19 solar, wind and geothermal power projects of the 26 in the Energy Department's portfolio shows that the pace at which funds have been released has been slow and uneven. Funding for the other seven loans, amounting to a combined $5.6 billion, comes from private lenders, with the Energy Department guaranteeing 80 percent of the principal. The department declined to discuss these loan disbursements.
(For a graphic, see link.reuters.com/ped92t)
The Treasury Department data provides a glimpse into how things are faring for the program, which the Obama administration hailed as a major job creator that would help wean the United States off its dependence on foreign sources of fossil fuels. The program was crafted during the Bush administration but funded as part of the 2009 economic stimulus.
"One of the things it tells you is that the program became highly politicized and it gridlocked the process of doling out money," said Theodore O'Neill of Litchfield Hills Research, after seeing the results of the Reuters review. Continued...