Yet again, evidence of impropriety surrounds the issuance of federal Department of Energy “green” loan guarantees — in this instance, loans were granted to a foreign company with Democratic Party ties.

Over the last two years, DOE Secretary Steven Chu has awarded Spain-based Abengoa — a sprawling, multi-national industrial firm operating in 70 countries — loan guarantees worth a staggering $2.78 billion for solar and ethanol plants.

Abengoa is a Madrid-based conglomerate that operates throughout Europe, the Middle East, Latin America, and Asia. It is not starved for cash: according to its 2009 annual report, the firm was valued at $25.5 billion, enjoying a cash flow of $4 billion and a net profit of $288 million. It is traded on the Madrid and Barcelona stock exchanges and employs more than 25,000 workers.

At first glance, Abengoa does not appear to require U.S. government-backed loan guarantees. In 2010 it qualified for private bank loans in 11 countries worth $161 million. In July 2009 alone,  Abengoa issued convertible bonds in Europe worth $688 million.

Overall, the Energy Department has awarded Abengoa three separate loan guarantees.

One was awarded on September 29, just before the deadline for the end of the fiscal year. This $132 million loan guarantee went to Abengoa Bioenergy Biomass of Kansas for the construction of an ethanol plant to be built in Dodge City. Earlier in September, a $1.2 billion loan guarantee was awarded to Abengoa to construct a solar facility in the Mojave desert. And in July 2010, DOE awarded a $1.45 billion loan guarantee to Abengoa’s Solana solar project. It is a highly leveraged arrangement: the deal was structured in such a way that the company has to put up very little of its own money:

Abengoa’s Solana 250 MW (net) project in Arizona finalized its Loan Guarantee from the DOE, which will cover up to $1.45B of the total $2.0B in project cost.

A small percentage of the balance will come from Abengoa. The piece that remains (around 25% of the total cost) will need to come from direct equity investors (such as NRG) and tax equity investors (such as Morgan Stanley and Union Bank).

Congressional leaders say the September issuance of DOE loan guarantees — including the two for Abengoa — may have been part of a group of loans that were rushed by the DOE to meet a September 30 funding deadline. In a September 20 letter to Energy Secretary Steven Chu, House Energy and Commerce Chairman Fred Upton (R-MI) wrote:

We are concerned that another rush to meet stimulus deadlines will result in DOE closing those deals before they are ready.

DOE ignored Upton’s letter: by September 30, DOE had released more than $4.7 billion in federal funds to several “green” energy firms.