State Gave $69 Million Loan to Green Energy Company on Verge of Bankruptcy

[rangerrebew]

State Gave $69 Million Loan to Green Energy Company on Verge of Bankruptcy

Steve Wilson / August 18, 2014

Biofuel manufacturer KiOR’s financial struggles might leave Mississippi holding the title to another failed green energy project.

According to the company’s quarterly report, without additional financing KiOR won’t be able to meet its financial obligations past Sept. 30.

One of its biggest creditors is the state of Mississippi.

The company owes the state $69.275 million on a no-interest loan to build a first-of-its kind plant to convert wood pulp into gasoline, fuel oil and diesel fuel in Columbus, Miss. It missed its most recent semi-annual payment of $1.875 million to the state, which granted forbearance June 3. But that ends Oct. 31.

The company revealed in its most recent quarterly report it lost $24 million in the previous quarter and $629.3 million since the company was founded in 2007.  The company’s stock price was down to 23 cents per share on the New York Stock Exchange last week after opening at $15 per share in 2011.

The state’s possible loss on KiOR would dwarf both the Yalobusha County beef plant (more than $50 million in a loan given in 2003 under the administration of then-Gov. Ronnie Musgrove) and Twin Creeks Solar ($26 million in 2010).

If KiOR defaults on its loan, the administration of then-Gov. Haley Barbour would be responsible for more than $95 million in taxpayer money spent on failed green-energy ventures.

Read more at Watchdog.org.

http://dailysignal.com/print/?post_id=154323

[Oceander]

Are there any "green" energy companies that haven't defaulted or gone bankrupt?

[GourmetDan]

That's how it works.  Government funds those companies and ideas that the market will not.

And there's usually a good reason the market won't fund them...

[truth_seeker]

The fedgov has mandated a certain percent of energy be derived from "alternative" sources. Same for many state governments.

So big electric power generating utilities, have to go along, to get along, and to get loans, licensing, permitting, etc.

A lot of crony capitalism involves lawyers who draft enormously complicated contracts, to secure or grant financing, out of public coffers, direct or guaranteed. Lawyers, accountants, securities brokers all earn fees for such instruments.

By the time it blows up, because the underlying economics were based on voodoo, the checks for the fees have already been cashed.

Such is the revolving door of elected, appointed offices, K street, financiers, lawyers, accountants, bond rating agencies, etc.

You say we need a railroad from Bakersfield to Stockton? No problema. We will have to run it on biofuels, however. You know, liquid transport fuel derived from lawn cuttings, deep fat frying grease, trash, etc.

What will that fuel cost? Oh, about $13 per gallon. But the differential wil be buried in various department general fund budgets, state and federal grants, financing, etc.

At the end of the day, it would take a team of genius forensic accountants weeks to discern what really goes on.

I have tried such exercizes with "redevelopment" and "low cost public housing" and it is mind-boggling.

Those interests (government employees, lawyers, accountants, financiers, etc.) all have a vested interest in two thing:

1. It is too complicated for mortals to unravel, and
2. That it continues.

[rangerrebew]

Just think of the massive amount of transportation and electric energy savings if the government downsized.  I don't believe there would be a problem with having enough energy then.  Of course I'm not suggesting the government is it's own worst enemy in energy conservation.

[Oceander]

The fedgov has mandated a certain percent of energy be derived from "alternative" sources. Same for many state governments.

So big electric power generating utilities, have to go along, to get along, and to get loans, licensing, permitting, etc.

A lot of crony capitalism involves lawyers who draft enormously complicated contracts, to secure or grant financing, out of public coffers, direct or guaranteed. Lawyers, accountants, securities brokers all earn fees for such instruments.

By the time it blows up, because the underlying economics were based on voodoo, the checks for the fees have already been cashed.

Such is the revolving door of elected, appointed offices, K street, financiers, lawyers, accountants, bond rating agencies, etc.

You say we need a railroad from Bakersfield to Stockton? No problema. We will have to run it on biofuels, however. You know, liquid transport fuel derived from lawn cuttings, deep fat frying grease, trash, etc.

What will that fuel cost? Oh, about $13 per gallon. But the differential wil be buried in various department general fund budgets, state and federal grants, financing, etc.

At the end of the day, it would take a team of genius forensic accountants weeks to discern what really goes on.

I have tried such exercizes with "redevelopment" and "low cost public housing" and it is mind-boggling.

Those interests (government employees, lawyers, accountants, financiers, etc.) all have a vested interest in two thing:

1. It is too complicated for mortals to unravel, and
2. That it continues.

Cannot disagree with you.  The groups you've identified are the masters of arbitraging government.