First Solar gets needed permit change for 230MW PV project
First Solar has received needed changes to a construction permit for the 230MW PV project it is building north of Los Angeles for Exelon, apparently clearing the way for initial funding of a $646m loan from the federal government.
Delays in the permit change had held up funding of the Department of Energy-backed loan for the Antelope Valley Solar Ranch (AVSR) 1, which could have forced First Solar to repurchase the project from energy giant Exelon.
With a new deadline to resolve the issue of 24 February looming, First Solar announced today that the changes were approved and that Exelon and First Solar agreed to extend the deadline for funding to 6 April "to allow sufficient time for the initial funding to occur", the company says in a securities filing. That is the deadline the Department of Energy (DOE) set for initial funding.
A recent review of the DOE Loan Guarantee Program suggests that the agency seek to "proactively protect the taxpayers' interest" when borrowers seek to renegotiate loan terms. In mid-2010, the DOE imposed more and stricter loan covenants that help it control whether to assume additional risk as projects advance to construction. For example, projects that run into may have funds withheld or face additional requirements.
First Solar did not say in its filing whether the DOE imposed additional requirements in exchange for extending the AVSR funding deadline.
First Solar, which is under contract to build, operate and maintain AVSR, says construction on the project has been proceeding.
The Arizona company is expected to report 2011 financial results shortly.