Abengoa, Obama’s Green Energy Project, on Verge of Bankruptcy

by San Antonio Attorney

Abengoa, a Spanish company and also President Barack Obama’s preferred green energy project is on the edge of bankruptcy.

The company is potentially giving taxpayers a problem with its multibillion-dollar debt.

The renewable energy firm constructed large-scale solar power projects in the United States backed by the government. The company received at least $2.7 billion in federal loan guarantees since 2010.

Abengoa will reportedly commence its insolvency proceedings this coming Thursday. This is an initial step toward a possible bankruptcy. Should this speculation be true, this situation could be much worse for taxpayers.

However, it is still uncertain how much of the guaranteed loans have been paid back by the company.

Critics are saying that Abengoa serves as a reminder that the administration’s interference in the energy sector can produce an unexpected outcome, and leads to disaster for taxpayers.

The Obama administration had been insisting that with proper financial backing from the government, large-scale renewable energy projects can succeed in the free market.

Abengoa’s stock price plummeted to about 60 percent last Wednesday.

Abengoa’s bankruptcy stands at about $21.4 billion, according to Reuters news agency.

This could mean that if the company will crash this would remarkably be the largest bankruptcy in Spanish history.

Company officials clarified that they are trying to sort out the problem with creditors to avoid filing for bankruptcy.

The company is already well-funded by several loans from governments worldwide.

The U.S. administration previously awarded the company about $2.7 billion for two major projects: the Solana Generating Station in Arizona and the Mojave Solar Project in California.

Obama personally endorsed the company last 2010 giving justifications to taxpayers why he was placing almost $1.5 billion to the solar power plant project.

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