ANOTHER TAXPAYER-FUNDED
SOLAR-ENERGY COMPANY FAILS, Collapse of
Spain's 'Solyndra' poses election-year embarrassment, by Jerome Corsi,
4/13/16
NEW YORK – The collapse of a
Spanish-based multinational renewable energies company could cause
election-year embarrassment not only to President Obama, Hillary Clinton, the
Clinton Foundation and the Democratic Party, but also to Republican
presidential candidate Ted Cruz and his wife Heidi, through their ties to
Goldman Sachs.
Announced Tuesday, Seville-headquartered
renewables multinational firm Abengoa plans to sell off four solar photovoltaic
power plants in Spain for a collective value of
$65.13 million, $57.26 million and a net cash flow of $13.9 million, helping
the company meet its debt-restructuring targets set out in its feasibility
plan.
The asset sale announced Tuesday
comes after the company sold
in February its 20 percent share in the 100MV Shams-1 concentrated solar power
plant in the United Arab Emirates to
the Abu Dhabi-based renewable energy company Masdar.
The Abengoa selloff, which has
included selling the company’s office headquarters in Madrid, is part of a
non-strategic divestment plan announced after the company went into bankruptcy
in November. The move is designed to reap approximately $112 million in
operating cash to stay in business until December.
The bankruptcy, the largest in
Spain’s history, was triggered after Gonvarri, an
arm of Spain’s industrial group Gestamp, decided in November 2015 against a
plan to invest $371 million into the company.
Last November, after the Abengoa
bankruptcy was announced, Reuters
reported the company’s bonds were
“virtually worthless,” as its share price plummeted 54 percent in a single day.
In a separate move Tuesday, a
local court in Mexico ordered the seizure of all Abengoa assets in the country in an effort to settle an action by bondholders
seeking to prevent the company from selling the Mexican assets without paying
the bondholders.
Abengoa’s stock closed Tuesday at
$1.49 per share, down 68.46 percent since Sept. 4, 2015, underperforming
S&P 500 by 75.78 percent.
Obama invested billions in
Abengoa
Abengoa was a renewable energy
company that scripted perfectly the Obama administration’s shift from
carbon-based fuel, providing a European counterpart to the U.S.-based Solyndra.
Solyndra was earmarked for funding
in the Obama “economic recovery” stimulus efforts that began in 2008 at the end
of the George W. Bush administration after the bank failures and economic
downturn occasioned by the collapse of the subprime mortgage market.
Last November, the
Washington Times reported Abengoa had
received at least $2.7 billion in federal loan guarantees since 2010 to build several
large-scale solar power projects in the United States. There was no certainty
any of the government loans would be paid back amid a collapse that dwarfed the
$530 million loss to the U.S. taxpayer with the collapse of Solyndra in 2011.
An
exposé by Town Hall on Aug. 4, 2012, found
that the then-estimated $2.8 billion Abengoa received in U.S. federal grants
and loans made the company the second largest recipient of the $16 billion
doled out through the Department of Energy Section 1705 loan guarantee
program, the
same DOE program that had funded Solyndra.
Hillary Clinton, the Export
Import Bank and Abengoa
In her 2016 presidential campaign,
Hillary Clinton has argued for the reauthorization of the Export-Import Bank,
insisting she wants to be “the small business president.”
Last June, Breitbart
reported that under the Obama
administration, Export-Import Bank lending has increased 248 percent, with U.S.
taxpayers now holding nearly $140 billion in Export-Import Bank exposure.
The same article noted Abengoa has
obligations of more than $225 million in Export-Import Bank support.
The article further observed that
Bill Richardson, appointed by President Bill Clinton as secretary of energy
from 1998-2001, was both an advisory board member to the Export-Import Bank and
a member of the Abengoa advisory board at the time the Export-Import Bank loan
commitments were made to Abengoa.
The
Washington Free Beacon reported in January 2013 that the Export-Import Bank had approved a $78.6
million direct loan to Abengoa in December 2012, as well as a $73.6 million
direct loan to a wind farm owned by Abengoa in Uruguay, noting Richardson’s
conflict of interest.
The Free Beacon pointed out that the
Export-Import Bank, as a function of extending taxpayer-backed loans to foreign
buyers of U.S. exports, estimated approximately 510 American jobs would be
supported by the Abengoa transactions.
“These two transactions demonstrate
the strength of American energy technology and highlight the importance of this
growing sector,” Export-Import Bank Chairman and President Fred P. Hochberg
said in a statement, as reported by the Free Beacon.
“In order for the U.S. to compete
globally, our companies must continue to produce cutting-edge energy
technology,” the statement continued. “President Obama set an ambitious goal of
doubling U.S. exports in five years, and these types of projects will help us
meet that goal in 2015.”
In an update to the Free Beacon
article, an Export-Import Bank spokesman insisted that Richardson “had no
communication with anyone at the bank” regarding the Abengoa-related
transactions.
Goldman Sachs, Ted Cruz and
Abengoa
The
fascination of Democratic Party politicos with Abengoa began in 2007, when former vice president Al Gore’s U.K. Generation
Investment Management bought a stake in Abengoa, a company Gore touted as “the
largest solar platform in Europe.”
Gore’s GIM was started in 2004 with
several Goldman Sachs’ executives, including David Blood, Mark Ferguson and
Peter Harris.
Today, Goldman
Sachs has an Alternative Energy Group that
specializes in investments of $10 million or more in renewable energy projects,
including solar energy.
In November 2015, Goldman
Sachs announced plans to invest $150 billion in renewable energy projects, including solar and wind farms, and energy efficiency
upgrades for buildings and power grid infrastructure.
In a move typical of Wall Street,
Goldman Sachs has turned the Abengoa bankruptcy into a profit alternative.
In 2014, Abengoa spun off a
“yieldco” under the name “Abengoa Yield” as a NASDAQ-listed company that
has taken “sufficient separateness provisions to insulate itself from the
bankruptcy of the parent company, Spain’s Abengoa SA,” according
to a report by rating agency Moody’s in March.
A “yieldco,” or “yielding company,”
is a relatively new Wall Street innovation that has sprung up in the renewable
energy sector since 2014, with strong support from Goldman Sachs.
A new “yielding company” is created
to separate from the parent a dividend growth-oriented subsidiary company that
bundles renewable energy operating assets to generate predictable cash flows to
investors, even if the parent company is dissolved in bankruptcy liquidation.
The concept behind a yielding
company is that the parent company developing renewable energy resources faces
high risk, including insolvency. But renewable energies, once developed, should
produce low-risk cash flows, especially if government subsidies remain in
place.
Goldman Sachs, one of the Wall
Street innovators in the “yieldco” phenomenon, is
one of the 113 institutional shareholders owning Abengoa Yield shares,
currently worth more than $45 million.
Today, Goldman Sachs’ enthusiasm for
investing in renewable fuels mirrors Ted Cruz’s position on alternative
energies. Cruz argues renewable fuels have a place in an “all of the above”
energy economy, with the presumption they will succeed with consumers even if
government price and policy intervention in the energy marketplace are phased
out.
During the Iowa primary
campaign, Cruz
supported the Renewable Fuel Standard, RFS, through 2022, arguing for the retention for six more years of
requirements set by the Environmental Protection Agency. The EPA requires
transportation fuel sold in the United States to contain a minimum proportion
of renewable fuels, including cellulosic biofuel, biomass-based diesel and
advanced biofuel.
“My view on energy is simple: We
should pursue an ‘all of the above’ policy,” Cruz
wrote in the Des Moines Register on Jan. 6.
“We should embrace all of the energy resources with which God has blessed
America: oil and gas, coal, nuclear, wind, solar, and biofuels and ethanol. But
Washington shouldn’t be picking winners and losers.”
He asserted his tax plan would phase
out all subsidies and mandates, including renewable fuel standards and the RFS
requirements, arguing that antitrust laws would ensure that the oil and gas
industry would not be able to block market access for ethanol producers.
Cruz’s argument depended on a
presumption that U.S. consumers, allowed full market access, would find “quite
popular” mid-level ethanol products like E25 or E30. Should that proposition
prove false, Cruz proposed no alternative to rescue renewable fuels from losing
in the open competition of a fuel market absent government intervention.
While Cruz has criticized the Obama
administration guaranteed loans to Solyndra, he has been silent on the Abengoa
bankruptcy and the development of Abengoa Yield, which generates profits today
for investors like Goldman Sachs while the U.S. taxpayer takes millions of
dollars of losses on government-subsidized loans.
http://www.wnd.com/2016/04/collapse-of-spains-solyndra-poses-election-year-embarrassment/
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