Bloomberg News

Solyndra’s Bid for Fresh Guarantee Never Considered, Chu Says

October 06, 2011

Oct. 6 (Bloomberg) -- The U.S. Energy Department never seriously considered providing a second loan guarantee for failed California solar-panel maker Solyndra LLC, Energy Secretary Steven Chu said.

“It was not ever in serious contention,” Chu said at an event in Washington today.

Solyndra, which filed for bankruptcy protection Sept. 6 and had its Fremont, California, offices raided by the FBI two days later, applied for a $469 million U.S. loan guarantee a week after winning U.S. backing for a $535 million loan in September 2009, according to a filing to the U.S. Securities and Exchange Commission three months later. The second guarantee would have helped finance an expansion of a factory the company hadn’t yet built.

The Energy Department informed Solyndra other applicants were being considered, said Chu, who attended the factory’s groundbreaking ceremony in September 2009.

Chu defended U.S. support for renewable energy loan guarantees.

“It’s very important to not say after one bad loan that, ’Oh, time to change path, this is no good,’” he said today.

Other countries are supporting clean energy as a way to become more efficient and competitive globally, Chu said.

“If we’re the last to recognize this, then we will be the importers,” he said.

E-mails released this week as part of a congressional investigation into Solyndra’s loan guarantee showed officials from the White House Office of Management and Budget worried the second guarantee request was imminent.

“I’ve been told we should expect to see that project soon for conditional commitment,” a budget office official wrote in an April 8, 2010, e-mail.

Another official said in an e-mail: “Possible to close and default on one before closing on a second??? Could be a record.”

--Editors: Steve Geimann, Larry Liebert

To contact the reporters on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net; Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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