First Solar resolves AVSR permit issue

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First Solar, project developer, announced in a filing on February 9 that financing for the 230 megawatt project was in jeopardy following the delay of a construction permit. This delay meant that initial funding of an up to US$646 million federal loan and loan guarantee from DOE was not received.

Already the January 10, 2012 deadline for receiving financing was pushed back by Exelon Corporation, which bought the project from First Solar last September, to February 24. If the funding had not been received by then, and the deadline was not pushed back again, First Solar would have had to repurchase AVSR for approximately $75 million, plus the project costs incurred by Exelon.

However, in an excerpt from a SEC 10-K form filed by Exelon before the resolution of the permitting issue, the company announced a new deadline for the funding. "While the construction permit may constitute a technical default under the loan guarantee agreement, based on discussions with the governmental body that issued the permit, Exelon believes a ministerial change to the permit should resolve the issue. DOE was notified of this issue and has extended to April 6, 2012 the date by which the initial loan advance must be funded.

Exelon says it intends to invest up to $713 million in equity in the Antelope Valley Solar Ranch, which has secured a 25 year power purchase agreement with Pacific Gas & Electric Company.