OPIC funds $253 million in overseas solar during 2017

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The U.S. Republican Party has consistently opposed the U.S. government participation in banking and other parts of the economy which have been dominated by the private sector, and this is certainly true of President Trump.

Which makes it strange that during the first year under the administration of U.S. President Donald Trump the Overseas Private Investment Corporation (OPIC) more than doubled the volume of loans that it provided for solar projects to $253 million, according to research published by Reuters.

This included a loan for a solar project in Zambia supported by First Solar, AES Corporation solar projects in Jordan and El Salvador and a project by a developer in India.

Together with wind and other renewable energy sources, clean energy projects represented 90% of OPIC loans in 2017, the highest portion since 2013. This allowed clean energy finance to rise even as the total volume of OPIC energy-related loans fell to $633 million.

OPIC and the Export-Import Bank played a critical role in jump-starting solar in Latin America, with government funding allowing U.S. solar companies SunEdison, SunPower and First Solar to land a series of projects in Northern Chile in 2013 and 2014.

However since that time the organization has been hit by scandal, and is currently under investigation by its internal watchdog for the loans made to three of these solar plants and a hydro plant in Chile. Two of the solar plants were built as merchant projects, a business model which has proven disastrous for the few solar projects which have tried it to date, and all three have had to restructure their debts.

The politics of OPIC deserve mention. As a development finance institution OPIC is a sort of government bank, and while it has largely fallen under the radar of many Republicans, it has drawn fire from the U.S. Senator most ideologically opposed to many parts of the Republican agenda. In 2015 Senator Bernie Sanders (I-VT) described the bank’s actions as “corporate welfare” and an incentive to invest outside the United States.