WASHINGTON - The government could lose nearly $3 billion on Energy Department loans for green energy programs - far less than the $10 billion Congress set aside for the high-risk program, according to an independent review.
The White House ordered the review after criticism of a $528 million loan to Solyndra Inc., a California solar company that went bankrupt despite a sizeable investment from the Tulsa-based George Kaiser Family Foundation.
The review, led by former Treasury Department official Herb Allison, looked at 30 loans or loan guarantees totaling $23.8 billion that were offered to green energy companies and auto makers such as Ford and Nissan.
The review did not involve Solyndra or Beacon Power Corp., a Massachusetts energy storage company that also went bankrupt after receiving a federal loan. The government has lost $567 million from those two loans so far, although officials said this week they could recover as much as $28 million from the sale of Beacon to a private equity firm.
The 75-page report, released Friday, says that about one-third of the money allocated - $8.3 billion - had been spent as of Nov. 28.
The White House ordered the review in October as congressional Republicans investigated the Solyndra bankruptcy amid embarrassing revelations that federal officials were warned the company had problems but nonetheless continued to support it. Energy Secretary Steven Chu attended a 2009 groundbreaking at the company's Fremont, Calif., headquarters, and President Barack Obama visited the company in 2010.
A White House spokesman called the report thorough, substantive and objective and said it confirms that the overall loan portfolio is expected to perform well.
The government could reduce its losses from the loan program if it withholds money from companies that fail to meet certain benchmarks, the report said. The comment echoes criticism by some Republicans in Congress who say the Obama administration should have cut off money to Solyndra far sooner than it did.
The report recommends several steps the Energy Department can take to improve the loan program, including creation of a chief risk officer to monitor all of the agency's loans. The risk management unit should be separate from the loan program office and should report directly to senior DOE managers, the report says.
Chu said the report makes clear that the Energy Department is operating under congressional requirements to provide loans to projects that would have trouble obtaining private financing.
Original Print Headline: Energy loans could cost $3B
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