First Solar Financing Pact Vs. Rough Sector Call From Goldman Sachs (FSLR)

A new 53 megawatt PV solar power plant is being built in Germany by First Solar, Inc. (NASDAQ:FSLR) and its German partner Juwi Holding AG. Construction began in January and is expected to be complete by the end of this year. The partners announced this morning that they have secured financing for the project, about 80% of which is non-recourse debt from a consortium of banks.  This might be great news on any normal day, but the solar sector in Europe is suffering a downgrade from Goldman Sachs.

The site for the plant is a former Cold War military zone, and the ground is supposed to be strewn with land mines, grenades, and other munitions, which will all be cleaned up as part of the project.

The project covers 162 hectares of land (about 400 acres) and will provide enough electricity to power 14,000 homes. It is the second-largest PV solar project in the world.

First Solar and Juwi Holding plan to sell a majority of the plant once the construction is completed. No cost for the plant was announced.

Germany is Europe’s leading installer of PV solar power generation, but the solar industry is not faring well in the current economic climate. Goldman Sachs today downgraded several German solar players, including SMA Solar Tech and SolarWorld to ‘Neutral’, and Q-Cells to ‘Sell’.

First Solar shares are down less than 1% in pre-market trading, at $137.50. The stock’s 52-week range is $85.28-$317.

Paul Ausick
April 21, 2009