Narrative
Full Description
Project narrative
On October 12, 2011, Bank of China entered into a $22.11 million USD loan agreement with Hoku Corporation and its subsidiary Hoku Materials, Inc. — a now-defunct Idaho-based clean energy firm that specialized in polysilicon production for solar panels — to provide term financing in support of the company’s construction activities in Idaho. The proceeds were used by the borrower for general corporate purposes, including construction and related expenses for the polysilicon manufacturing facility under development in Pocatello, Idaho. The maturity of the loan is not explicitly stated, but the agreement required full repayment in accordance with terms secured by one or more standby letters of credit procured by Tianwei, a Chinese state-owned enterprise and parent of Hoku Corporation. These standby letters of credit were issued in favor of Bank of China’s New York Branch to guarantee repayment. Under a separate reimbursement agreement, Hoku also committed to repay Tianwei for all interest, fees, legal costs, and other expenses incurred in connection with the issuance and maintenance of the letters of credit.
Staff comments
1. The entirety of the loan agreement can be accessed at https://contracts.justia.com/companies/hoku-corp-35627/contract/636787/ 2. Hoku Corporation was a U.S.-based clean energy company headquartered in Pocatello, Idaho. It began in fuel cell technology before transitioning to solar manufacturing. In 2009, it became majority-owned by China’s Tianwei New Energy Holdings. Hoku declared bankruptcy in 2013, and its assets were liquidated.