Friday, December 26, 2008

SunPower (U.S.) Gets RM1 BILLION loan from Malaysian government for Solar-Panel Plant

Bloomberg reported that SunPower Corp., the second-biggest U.S. solar-cell maker, said it can borrow as much as USD288 million (ONE BILLION RINGGIT) from the Malaysian government to fund a solar-panel project in the southeast Asian country.

The San Jose, California-based company plans to use the funds to build a factory in Malaysia to produce more than 1,000 megawatts a year of the panel components, the company said in a statement. The unit, the company’s third in Malaysia, may start output in 2010, the company said in a statement in May.

The loans within the agreement are divided into two tranches, and the weighted average interest rate applicable to the two tranches is competitive with the cost of borrowing under SunPower’s existing line of credit,” the statement said.

The loans can be drawn upon through 2010 and the principal is to be repaid in six quarterly payments starting in June 2015, it said.

Some questions that need answers

Perhaps the Malaysian government can clarify why an FDI from the U.S. is entitled to RM1 billion of funding?

Typically, FDIs are given a slew of incentives such as pioneer status, tax and duty exemptions and waivers, cheaper land, cheaper electricity and water and the like.

It is unusual, to say the least, that a publicly-listed U.S. technology company is entitled to loans from the Malaysian government.

  • RM1 billion is a lot of money to set aside. Where is the source of these funds?
  • Was this part of the 2009 Budget?
  • What are the terms of repayment?
  • What is the interest charge?
  • What is the collateral for the loan?
  • Can the loan agreement be made public?
  • How many Malaysians will be employed?
  • Will there be any transfer of technology?

So many questions.

It would be good if the Malaysian government can issue a public clarification on this deal in light of the RM7 billion package, part of which comprises the RM5 billion Valuecap package which is to be borrowed from EPF.

Again, where is the source of funds for the ONE BILLION RINGGIT loan to SunPower?

1 comment:

walla said...

This smells of another InventqJaya. Whether the asset will be here or in the US is immaterial. It is the business case and the integrity process leading to the loan decision which are germane. Is the govt trying to outdo TNB, Maxis, Maybank, IOI, CMS and Sime Darby in the way investments are being handled using shareholders money?