, president of Honduras, visited a ridge called Hula Hill last month to break ground for a new electric plant that will use 51 wind-powered turbines made at the
plant in Falls Township.
The site is supposed to produce 6 percent of the Central American nation's electric power when it goes on line next year.
"The wind blows past; we've got to put it to work," Lobo told Honduras' La Prensa newspaper. "This way, we won't have to fight high oil prices."
Work at the plant, built by the Honduras arm of Costa Rica-based Mesoamerica Energy, was financed by a low-cost $159 million loan from Export-Import Bank, a U.S. government-run, self-financed lender that offers cut-rate capital to foreign companies and governments that buy products made in the United States. The loan was guaranteed by American taxpayers.
Wind power in hilly Honduras doesn't get or need public subsidies; the country doesn't dig its own coal, uranium, or oil, so wind power is cheaper than burning fuel, Ex-Im president Fred Hochberg said.
So why does this project need a government loan? "The world is building infrastructure at a rate not seen before, [but] banks, after the crisis, are reluctant to lend in places they perceive to be risky," Hochberg said.
To bridge the gap and boost sales of U.S. products, Ex-Im supplies U.S. employers' foreign customers with "political insurance, backed by the full faith and credit of the U.S. government," Hochberg said.
The 18-year loan is set at 1 percent above U.S. Treasury rates and backed by a Honduran government promise to buy wind power for at least 20 years.
Mesoamerica would have to pay a lot more to borrow that much from Citigroup or European banks, and it would have a tough time getting an 18-year term, Gamesa officials say. Hochberg says Ex-Im's current loan-default rate is 1.5 percent, which it covers through fees and interest, without needing taxpayer subsidies.
"We're looking for more deals in Latin America," Gamesa Wind USA's chief executive, Dirk Matthys, told me. That could boost employment at Gamesa, which has 150 staffers in the Philadelphia area and 650 more upstate.
Ex-Im hopes to make more direct loans and loan guarantees to Gamesa customers, Hochberg said.
A lot will depend on what President Obama proposes and Congress does with the bank in next week's budget plan.
Ex-Im says it gave profits totaling $5 billion to the U.S. Treasury last year.
Like the Securities and Exchange Commission and a few other government agencies that bring in more cash than they spend, Ex-Im wants to keep a bigger share of what it raises and put the money to work on its own programs.
It's up to Washington how much Ex-Im will have to spend to help cover the U.S. budget deficit next year, and how much it will be able to spend on extending credit to foreigners so they can buy U.S. products and support export jobs.
Philadelphia capital is buying businesses around the country, chasing profits. Two new examples:
RAF Industries, the $260 million Jenkintown investment firm owned and run by Temple business school donor Robert A. Fox, says it has "made a significant investment" in Cool Gear International L.L.C. of Plymouth, Mass., which designs and makes freezer-gel bottles and coolers.
Cool Gear founders Donna and Hank Roth "will continue to lead the company," Fox said in a statement. RAF says it typically invests $25 million or more in the companies it backs.
Separately, LLR Partners, the $1.4 billion West Philadelphia buyout fund backed by investor Ira Lubert and Pennsylvania's state pension system, says it has "made a growth-capital investment" in St. Louis wheelchair and personal-power-vehicle maker United Seating & Mobility and its 36 sites around the United States.
LLR, which typically invests $15 million or more in a company, says it is backing the company along with new money from United Seating boss Bob Gouy and other managers.