A government watchdog has been called upon by a leading Senate Republican, John Barrasso, to examine the recent $1.66 billion financing extended to Plug Power, Inc. (NASDAQ:PLUG), citing concerns about potential conflicts of interest and risks to U.S. taxpayers.
"Given the significant financial implications and the need to maintain public trust, a thorough investigation into the LPO's conditional commitment to Plug Power is essential to ensure transparency and accountability within the LPO," Barrasso wrote in the letter to Energy Department Inspector General Teri Donaldson made public Wednesday.
Last month, Plug Power received a conditional commitment from the Biden administration for $1.66 billion in loan guarantees to construct up to six facilities.
"Earlier this year, Plug successfully demonstrated our innovation and technical ability by launching the first commercial-scale green hydrogen plant in the country in Woodbine, Georgia. This loan guarantee will help us build on that success with additional green hydrogen plants," said Plug Power CEO Andy Marsh in a press release dated May 14.
Senator John Barrasso, the leading Republican on the Senate energy committee and a critic of the Energy Department loan program, has urged the agency's inspector general to scrutinize "any potential impropriety" by the program and its director, Jigar Shah, an experienced clean-tech entrepreneur, Bloomberg reported.
The report noted that the company's shares initially soared, reflecting its significance for growth plans, but they have since retraced much of those gains.
Expressing concern, Barrasso highlighted the relationship between Shah and a Plug Power lobbyist, purportedly described as Shah's "longtime friend."
He also questioned Plug Power's financial stability following a reported loss of over $1.3 billion in 2023.
According to Benzinga Pro, PLUG stock has lost over 29% in the last six months.
"It also appears that Plug Power only resolved its November 2023 going concern warning in March of this year," Barrasso said.
"Such significant losses raise questions about DOE's prior decisions to provide Plug Power with tens of millions of dollars in grants as well as DOE's conditional commitment to provide a $1.66 billion loan guarantee," Barrasso added.
As Republicans target the Energy Department's loan program, aiming to uncover a Solyndra-like failure in an election year, the letter underscores their scrutiny, Bloomberg added. President Biden's climate legislation granted the program substantial new loan authority, amounting to hundreds of billions of dollars.
Price Action: PLUG shares are trading lower by 6.21% to $3.02 at last check Wednesday.