Email
Password
Remember meForgot password?
    Log in with Twitter

article imageU.S. has doubled financial support for solar projects overseas

By Karen Graham     Feb 14, 2018 in Politics
The United States government doubled its financial support for solar power projects overseas last year under a climate-friendly investment policy written in the last days of the Obama administration, according to a Reuters review of government documents.
The findings of the government's support of foreign solar projects come despite an ongoing investigation into previous U.S. loans overseas for similar projects. Another issue causing deep confusion is President Trump's publicly stated position on renewable energy projects and his rejection of climate change and push to reestablish coal as a primary energy source.
At the center of the whole issue is the Overseas Private Investment Corporation (OPIC), the government’s international finance institution. Established in 1971 as a government agency, OPIC's mission is to mobilize private capital to help solve critical development challenges and, in doing so, advances the foreign policy of the United States and national security objectives. The agency operates at no net cost to U.S. taxpayers.
View the port of Valparaiso  Chile
View the port of Valparaiso, Chile
MARIO GOLDMAN, AFP/File
OPIC also works with the private sector in the U.S., so while helping out our foreign neighbors, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad. Part of OPIC's mission includes providing investors with financing, political risk insurance, and support for private equity investment funds when commercial funding cannot be obtained elsewhere.
According to investment documents seen by Reuters, OPIC loaned over $630 million to foreign energy projects in 2017, 90 percent of which were solar, wind, or other low-carbon ventures. However, in 2016, OPIC funded $797 million in energy financing, of which 61 percent went to renewable energy projects.
In all, according to the documents, it shows that the agency's total lending for solar projects more than doubled in 2017, at $250 million, supporting projects in India, Africa, and Latin America.
The EDF Energies Nouvelles solar plant in Pirapora  Minas Gerais state  Brazil  will be Latin Americ...
The EDF Energies Nouvelles solar plant in Pirapora, Minas Gerais state, Brazil, will be Latin America's largest solar power facility when it is fully operational in 2018
CARL DE SOUZA, AFP
So, what's the big deal?
It seems that when OPIC was first established, it had its origins in the post-WWII Marshall Plan. Th U.S. government decided that providing private funding for overseas investment did more good than just handing out aid money. But to ensure that returns generated overseas in foreign currencies would be convertible into U.S. dollars, a new tool—political risk insurance—was expanded in the 1950s to cover losses from war and expropriation.
Out of the preliminaries surrounding the best way to operate the Marshall Plan, it finally came to pass that an idea was born. It called for the development of an overseas private enterprise development corporation - funded by the United States. That is how OPIC was first approached and became an entity of the federal government. It also received bipartisan support.
So everything went along quite well, until the 2000s, when climate change and concerns for the environment became a hot issue. OPIC was taken to court for "financing fossil fuel projects detrimental to a stable climate, in violation of the National Environmental Policy Act (case filed in 2002 and settled in 2009)."
Change in policy just days before Trump takes office
Literally, days before President Trump's inauguration in January 2017, OPIC formally announced its preference for a "climate-friendly energy in an environmental and social policy statement," according to Reuters. The announcement was entirely in-tune with President Obama's policies but out-of-whack with the current administration's ideas.
As a matter of fact, Trump wants to stop funding the agency, even though it cost's taxpayers nothing, and contributes towards deficit reduction, provides US jobs and helps to promote economic development overseas. Trump lost out in his bid to remove OPIC funds last year, though.
So Trump has done the next best thing - He appointed Texas businessman Ray Washburne to lead the agency. Washburne has said he would focus OPIC on two goals: empowering women in the developing world and serving U.S. strategic national security interests.
What does this mean for OPIC? Who knows. Perhaps it will now provide funding for military bases overseas.
More about opic, overseas investments, Trump, solar projects, development finance institution
 
Latest News
Top News