Meet Solyndra 2.0: This US-Taxpayer-Subsidized Spanish "Renewables" Firm Is Collapsing

News that bonds and stocks of Abengoa SA - the Spanish renewable-energy company - plunged after a plan to shore up capital failed to reassure investors that it can stop burning cash is likely to have passed many by. But coming just one day after President Obama unleashed his Clean Power Plan, the fact that the company - that is now facing significant liquidity concerns - received over $230 million in US taxpayer subsidies in 2014 - despite two ongoing federal investigations - may raise an eyebrow or two as images of Solyndra's government-sponsored farce come to mind... as Diane Feinstein, Ken Salazar, and Bill Richardson - with the help of subsidies and Ex-Im bank loans alledgely exerted their influence to keep this zombie alive.

In 2014, as FreBeacon reports, the Spanish renewable energy company under investigation by at least two federal agencies unveiled a new biofuel production facility on Friday that will receive hundreds of millions of dollars in federal subsidies.

 

 

Former employees of the company have alleged that it routinely engages in violations of U.S. immigration, environmental, and workplace safety laws and uses taxpayer funds to hire foreign workers in violation of federal regulations.

 

The company received a $132.4 million loan guarantee and a $97 million grant to build a new biofuel plant Hugoton, Kansas. Energy Secretary Ernest Moniz and Kansas Gov. Sam Brownback attended its ribbon-cutting ceremony on Friday.

 

The announcement of additional subsidies came even as U.S. Customs and Immigration Service and the Department of Labor conduct investigations into potential legal violations by the company.

 

Both agencies have policies against commenting on ongoing investigations.

 

In addition to direct taxpayer support for the company, Abengoa benefitted tremendously from federal mandates for biofuels, according to CEO Manuel Sanchez Ortega.

 

“This would have been simply impossible without the establishment of the Renewable Fuel Standard,” Ortega said, referring to a federal regulation that mandates the use of certain levels of bio energy in transportation fuels.

And now, less than one year later, as Bloomberg reports,

 

 

Abengoa SA’s bonds and shares plunged after the Spanish renewable-energy company’s plan to shore up capital failed to reassure investors that it can stop burning cash.

 

Abengoa said on Monday that it’s seeking to raise 650 million-euros ($713 million) of capital and dispose of 500 million euros of assets, according to a regulatory filing.The Seville-based company stepped up disposal plans from 400 million euros as recently as Friday, when it also told investors that corporate free cash-flow for 2015 will be as much as 800 million euros lower than previously forecast.

 

The predicted shortfall is the latest in a series of announcements that have eroded trust in Abengoa’s accounting methods and ability to generate sufficient cash to service its debt. The company, which spooked the market by reclassifying some bonds in November, has consolidated net debt that exceeds 6.5 billion euros.

 

“There were liquidity concerns before and this downward revision of corporate free cash flow guidance is disappointing,” said Felix Fischer, a credit analyst at Lucror Analytics Pte Ltd. in Singapore. “The capital increase more or less just covers the shortfall. There are serious liquidity concerns for this company and bondholders believe this measure isn’t sufficient.”

It's ugly!!
 

As Caixabank ominously warns, "we see [Abengoa's] capital increase as necessary to recover confidence in its balance sheet and liquidity."

Which would normally be shrugged off by an American public - meh, what do we care about the bankruptcy of some Spanish energy firm?

Well... combine political influence... US taxpayer subisides... and corruption... and maybe Americans should care... (as Free Beacon details)

 

 

Mike Alhalabi, a former senior lead mechanical engineer at Abengoa subsidiary Abener who worked on the Mojave facility, said the company routinely skipped right to international hiring, preferring to bring in workers from its native Spain.

 

It did so even for menial jobs, Alhalabi recalled.

 

“They [hired] people to move furniture around and they were all Spanish,” he said. “I mean, this is work that you can hire Americans to do. Why would you bring people from Spain to move furniture around?”

 

Potentially illegal hiring practices caught the eye of another employee, who said the company was well aware that it was violating U.S. immigration laws.

 

“What I came to realize, and it took me a while because I didn’t want to realize it, is that they understood. They knew the law. They didn’t care,” said Lydia Evanson, the former human resources director at an Abengoa subsidiary in Arizona.

 

“I really came to believe that they’re so politically connected that it’s just hubris and arrogance,” Evanson said.

 

Alhalabi also saw political connections at work. He noted the involvement of former vice president Al Gore, whose company, Generation Investment Management, bought a stake in Abengoa in 2007.

 

“Behind the scenes, what brought Abengoa to the United States, based on my research, [was] Al Gore,” Alhalabi said in an interview. “He promised to bring U.S. dollars to the company.”

 

Alhalabi also singled out Sen. Diane Feinstein (D., Calif.), saying she was part of Gore’s team working behind the scenes to support Abengoa’s activities in her home state.

 

Feinstein in 2010 asked then-Interior Secretary Ken Salazar to expedite an environmental review of one of its stimulus-backed solar plants, despite concerns that it could impact endangered species in the area.

 

The month after she sent a letter to Salazar making the request, Interior’s Fish and Wildlife Service signed off on the project.

 

Salazar attended Friday’s ribbon-cutting ceremony for Abengoa’s new biofuel facility.

The company’s political connections are emblematic of an industry that remains reliant on taxpayer subsidies, according to William Yeatman, a senior fellow specializing in energy policy at the Competitive Enterprise Institute.

 

 

“It could not be more clear that this company could not survive without access to government favors from political friends,” Yeatman said, citing its reliance on the Renewable Fuels Standard and continued financial support from DOE.

 

“Alas, the same can be said for the green energy industry as a whole, which would fast wither and die absent a steady diet of taxpayer and ratepayer subsidies,”Yeatman said.

 

In addition to its DOE subsidies, Abengoa received $185 million in financing in 2012 and 2013 through the U.S. Export-Import bank as former New Mexico Gov. Bill Richardson (D) sat on the boards of both the federal agency and the company it was subsidizing.

 

Despite extensive federal support for the company, Alhalabi described a culture of disregard for workplace safety and environmental contamination. Concern over high costs has led to lackluster engineering work at the company’s Mojave facility that could result in an “environmental disaster,” he said.

Solyndra 2.0? Another one off? Or another symptom of the Oligrachic ignorance of where the money comes from...It appears US taxpayers can kiss that money goodbye...