April 14, 2014
The Department of Energy’s Loan Guarantee to Abound Solar Manufacturing, LLC
The Department of Energy's (Department) Credit Review Board conditionally approved a loan guarantee to Abound Solar Manufacturing, LLC, (Abound) in July 2010. In December 2010, the Program issued the loan guarantee to Abound for up to $400 million to construct and commission thin-film photovoltaic solar panel manufacturing facilities in Colorado and Indiana. In September 2011, Abound failed to meet certain milestones and the Program suspended funding to the project. Subsequently, Abound filed for bankruptcy in July 2012. Prior to the filing, the Department had approved the disbursement of approximately $70 million in loan funds to Abound.
Our audit revealed that Abound's failure to meet its project milestones and its subsequent bankruptcy occurred as a result of a combination of market conditions and technical issues that negatively impacted its operations. Although the Department had identified, considered and taken steps to mitigate the market and technical risks, and had reduced the financial exposure to the project by suspending funding when Abound did not meet its project milestones, our audit identified several weaknesses in the Department's administration of the Abound loan.
The issues we identified occurred because the Program had not established comprehensive policies, procedures and guidance for awarding, monitoring and administering loans. Management generally concurred with our recommendations and indicated that it would take or had already, implemented actions to address them.
Topic: Management & Administration