The company proposing to build a 420-megawatt solar farm in
southern San Benito County in recent months has developed several
ties with Asian investors in its efforts toward raising the
necessary capital to get the project approved by the end of the
year. Most recently, Solargen Energy’s chief executive officer has
been in China recruiting potential investors through the federal
immigration EB-5 program. It allows foreign financiers and their
families an opportunity for green cards and permanent residency by
investing at least $500,000 toward development of jobs in
designated high-unemployment areas such as San Benito County.
The company proposing to build a 420-megawatt solar farm in southern San Benito County in recent months has developed several ties with Asian investors in its efforts toward raising the necessary capital to get the project approved by the end of the year.
Most recently, Solargen Energy’s chief executive officer has been in China recruiting potential investors through the federal immigration EB-5 program. It allows foreign financiers and their families an opportunity for green cards and permanent residency by investing at least $500,000 toward development of jobs in designated high-unemployment areas such as San Benito County.
Its most recent quarterly report released in March also recognized that to this point Solargen has one “binding preliminary panel supply agreement,” with a Taiwanese company called NexPower, to manufacture up to 50 percent of the farm’s solar panels.
A third connection to the East – which showed up in its annual report released in December – is that Solargen lists its second-largest shareholder as Taiwan-based UMC Capital Corp, which owns about a 17 percent stake in the corporation.
All of those ties appear to be crucial for Solargen in moving to get all of its finances and infrastructural needs in order as the Panoche Valley solar farm continues to progress through the process with San Benito County.
Next month, Solargen plans to submit its environmental impact report as it continues on track toward a prospective approval before year’s end, said John Pimentel, a company adviser who recently briefed the Free Lance Editorial Board on Solargen’s latest developments.
Fitting in with that time frame is a necessity to obtain capital contributions from the federal and state governments – incentives Solargen executives are depending on to make the finances work, and the project feasible.
Solargen must raise 5 percent of the total project cost – currently estimated at $1.2 billion – to obtain the outside government funding. That would equal about $60 million upfront, or a quarter of the original estimate of $80 million down before Solargen scaled back the facility’s projected production to a third of the initial expectations.
To raise a large portion of the necessary downpayment of sorts, CEO Michael Peterson in recent weeks has been in China meeting with migration agencies there to solicit investment into the project through EB-5, created two decades ago in federal immigration law to entice investment in American companies while allowing expedited visas for participants.
Solargen hopes to raise $30 million through the program, Peterson said.
Those taking part in EB-5 are eligible for permanent green card status by contributing toward such projects in targeted employment areas, including a region that includes the San Juaquin Valley and San Benito County, Peterson noted.
For Solargen to get involved – U.S. Citizenship and Immigration Services has approved of the company’s eligibility – it had to show the project would generate an equivalent to 600 direct and indirect jobs.
The company plans to employ 150 to 200 workers, but Solargen qualified due to a formula that weighs the average salary in the area – around $30,000 annually – in multiplying the number of equivalent jobs created by the prospective project, the CEO said.
Since some of the positions would demand pay of more than $100,000, those would count toward at least three equivalent “direct” jobs, some more than that, according to the formula. That does not include the “indirect” jobs that the program surmises – through a multiplier – also would be created through the economic growth spurred by the people hired to work here.
“The whole program is foreign investors investing in areas with (high unemployment) in order to help create jobs locally,” Peterson said by cell phone from China.
He stressed how it has no relation to the company’s intention to hire locally for the project. Overseas residents, meanwhile, cannot be employed for the project under such a scenario, he pointed out.
Solargen in the earlier stages of the proposal’s development did express the prospect of having a manufacturing facility built nearby in Fresno County, but it appears unlikely that would occur at this point. Peterson noted how the company had been seeking a grant for that portion of the proposal and how it has not come to fruition.
“At this point, it’s not going to happen,” he said, of the regional plant.
Instead, Solargen has been in talks with panel manufacturers such as NexPower. Peterson said Solargen has an agreement with the Taiwan company to provide up to 50 percent of the panels for the 420-megawatt facility on nearly 5,000 acres. The company’s most recent quarterly report – released two months ago – noted how that deal was for at least half of the first phase, to include 20 megawatts.
“We’ve got an agreement for 50 percent of the panels if they are at the right price and at the right efficiency,” Peterson said. “That’s important. It’s not easy to get panels.”
He went on, while noting Solargen’s talks with “three to five” other panel builders: “We’re a project that every manufacturer wants to provide panels to.”
As for Solargen’s association with UMC Capital Corp. – the Taiwan-based company owning about 3.5 million shares, or 17.2 percent of the stake – the shareholder has an office in San Jose, according to Solargen representative Kathy Johnson.
UMC Capital Corp. is listed as owning the second most shares after Eric McAfee, a founder and director with nearly 19 percent of the stake, according to the 2009 annual report.
