The U.S.-based thin film manufacturer has reported that work on the photovoltaic project, located in northern Los Angeles County, California, is underway. However, the company has not received initial funding of the Department of Energy (DOE) loan "pending resolution of an outstanding construction permit issue".
In addition to having developed the photovoltaic project, First Solar will build, operate and maintain it. The company sold it to the Exelon Corporation. However, according to the agreement, should the initial funding of the loan not occur within approximately four months, First Solar has to repurchase the project.
In a statement released by the company, it said, "Because all conditions have not yet been satisfied, the parties have agreed to extend the timeframe for initial funding of the loan to February 24, 2012." If the funding has still not been received by then, and the deadline is not pushed back again, First Solar will have to repurchase AVSR for approximately US$75 million, plus the project costs incurred by Exelon.
The company says that if this does happen, it will then re-sell the project to another party. It added, "First Solar expects its current cash and other capital resources would be sufficient to enable First Solar to repurchase AVSR, if necessary, while meeting First Solar's working capital and capital expenditure needs. First Solar expects to begin recognizing revenue for AVSR following initial funding of the loan."
Last January, First Solar received final and non-appealable environmental permitting for the AVSR. Overall, the construction period is set to last for between three and four years, and is expected to create up to 400 jobs.
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