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Tenaska Closes Financing For 130 MW Solar Plant, First Solar To Benefit

April 9, 2012

Despite equity investors willingness to abandon the solar industry over the last few months, commercial banks still see the potential for profits in solar power as solar developer Tenaska announced today they have closed the financing for the Imperial Solar Energy Center South. The 130 megawatt (MW) plant is currently being developed on 946 acres in southern California.

Bank of Tokyo-Mitsubishi UFJ, Ltd. and Union Bank, N.A. lead the debt financing and BBVA Compass, DZ Bank, Helaba, Key Bank, Lloyds TSB Bank, Royal Bank of Canada and Santander’s Sovereign Bank are also providing funding for the project.

The project appears to be a relatively safe, long-term investment for the banks as San Diego Gas & Electric has agreed to purchase approximately 130 MW from the plant under a 25-year power purchase agreement.

All of this is good news for the beleaguered manufacturer First Solar (FSLR :NASDAQ) as they engineering, procurement, and construction provider for the project that is scheduled to be completed in 2014.

For Tenaska, the debt financing should allow them to focus their resources on other projects, including the 150 MW Imperial Solar Energy Center West, also located in southern California. But instead of using Arizona-based First Solar, Tenaska and San Diego Gas & Electric chose Paris-based Soitec for the project. As part of the project, Soitec did agree to build a manufacturing plant in San Diego County adding another “local” competitor to the mix for First Solar.

Despite the good news, shares of First Solar were off 3.19 percent in afternoon trading. The decline outpaced Nasdaq which was off 1 percent.

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