Solar panel maker Solaria had tens of millions of dollars in private equity lined up in 2011 to finance an overseas expansion, but opted instead to go with an independent federal agency that offered good terms and seemed eager to provide funding.
But a year after signing a $30 million commitment letter, the Overseas Private Investment Corp. walked away from its deal with Solaria, forcing the company to lay off employees and struggle to regroup, said Solaria President Suvi Sharma.
As Mr. Sharma tells it, the problem wasn't with his company or its solar panels, but with a similarly named and now defunct operation just a few miles away in Fremont, Calif.: Solyndra, a solar panel manufacturer that went bankrupt in 2011, leaving taxpayers on the hook for more than $500 million in government loans.
That bankruptcy spawned congressional investigations and embarrassing headlines for the White House, and Mr. Sharma said it changed things at OPIC.
For instance, the agency had planned to make its commitment letter to Solaria public through a press release, but instead insisted that the news be kept quiet, he said. After months of unexplained delays and increasing demands, OPIC killed the deal altogether, he said.
OPIC officials never mentioned Solyndra in their letter pulling their commitment, but Solaria officials say they are certain that's what is to blame.
This week, Solaria filed a nearly $30 million protest in the U.S. Court of Federal Claims, which, along with email correspondence between the company and agency, offers a detailed account of how the loan came undone amid the backdrop of the Solyndra scandal.
"While we share a similar location as Solyndra, we're very different in terms of technology and how we run the company," Mr. Sharma said. "We've been more frugal and under the radar."
In an email, a spokeswoman for OPIC declined to comment because the matter is under litigation.
The administration publicly defended its Solyndra loan, but Solaria's complaint paints a different picture inside OPIC.
"We definitely believed there were political motivations," Mr. Sharma said.
"There were forces there who saw it as a political problem and a PR problem that we're a solar company in Fremont, Calif." That's also where Solyndra was based.
Company attorneys said as much, though in sharper terms, in the bid protest they filed on behalf of Solaria this week, saying OPIC "cowered at the bad publicity and political pressure" after Solyndra.
OPIC committed to the $30 million loan in September 2011, but the company heard little more for months except assurances that the financing was on this way, Solaria officials say.
Company officials earlier asked an OPIC official conducting a due diligence investigation whether the agency had ever refused to sign off on a loan after signing a commitment letter, according to the complaint.
OPIC officials said they had "no memory of that ever happening," according to Solaria.
Still, increasingly concerned by the delays, Sharma and other company officials met with OPIC's senior vice president, Jim Polan, in April 2012, according to the company.
"I personally guarantee this loan will be completed," the complaint quotes Mr. Polan as saying twice during the meeting.
Weeks passed, but officials still heard nothing. They turned to Nancy Pfund, a member of the company's board of directors who met again with Mr. Polan in May in Washington.
According to the complaint, Mr. Polan said "OPIC was happy with the progress since Solaria had exceed all goals set by OPIC."
She passed along the assurances to the board: "I met with Jim Polan at OPIC in DC on May 10," she reported, according to the complaint. "He was very supportive of Solaria and referred to the loan as moving forward."
Meanwhile, company officials said, they decided not to pursue other financing and continued spending to ramp up production and marketing for the India project.
Then came unexpected news.
In a September 2012 letter, OPIC sent word that it was withdrawing its commitment citing, among other reasons, changes in Solaria's business model and "steep and unforeseen declines in the pricing of solar panels."
The letter from OPIC general counsel Don S. De Amicis also mentioned "material changes to Solaria's business and prospects" in the letter pulling the deal.
In court papers, Solaria described the move as a "sudden and unforeseen" cancellation that cost the company $28.6 million. Officials also balked at the reasons provided by OPIC in Mr. De Amicis' letter.
Solaria saw the move as tainted by Solyndra.
"OPIC's motive for making such boldfaced lies is the fact that another California producer of solar panels, Solyndra, engaged in unseemly behavior and promoted unworkable technology becoming a national political point of contention," the company argued in the protest.
"When this happened, it became likely that members of Congress would inquire into the loan made to Solaria."
Unlike Solyndra, Solaria hasn't gone bankrupt.
But Mr. Sharma said the company has had to lay off employees, though he declined to say how many.
"The good news is we're still around and standing, but we were hurt very badly," Mr. Sharma said. "We have had to significantly reduce our operations and our head count."
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