Sunpower Corp. (MM) (NASDAQ:SPWR)
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5 Years : From May 2012 to May 2017
SunPower Corp. (SPWR) expects the first payment by the end of March on a federal loan for a large California solar farm, after a delay following new government financial requirements, the company's top executive said Wednesday.
The Department of Energy in September issued a $1.237 billion loan guarantee for the 250-megawatt solar farm in San Luis Obispo, Calif., which SunPower is building after selling the project to NRG Energy Inc. (NRG).
SunPower started construction in September and has more than 350 employees working at the site right now. But payment on the project's government loan was held up after the department increased its financial requirements for SunPower, Chief Executive Tom Werner said.
The Department of Energy "has rigorous standards for loan guarantees and those standards are becoming increasingly rigorous," Werner said in an interview.
French oil major Total SA (TOT, FP.FR), which owns 66% of SunPower shares, stepped in to pledge financial backing for SunPower, to comply with the government's new requirements, according to Werner and a document SunPower filed Wednesday with the Securities and Exchange Commission.
Under an agreement that Total, SunPower and the department signed Tuesday, Total agreed to provide up to $600 million to ensure that SunPower would complete the project.
Werner said the financial backstop was unnecessary, but the company was pleased that Total provided the agreement to appease the Energy Department.
"We don't need this additional support,"Werner said. "We feel really positive having Total as a partner to keep one of the largest solar-power projects being built in the world on track."
Werner said he expects funds from the government loan to flow by the end of March.
SunPower plans to complete more than 100 megawatts of the project by the end of 2012.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; email@example.com