Alcoa Inc (NYSE:AA) has been given a nod for the loan worth $259 million by Advanced Technology Vehicles Manufacturing program. The loan is being approved so that Alcoa can upgrade its factory which manufactures durable and strong aluminium for improvising gas mileage of the vehicles. With the approval of loan to Alcoa, the U.S. Clean-Energy Program, which was reputed for being maligned as of now, has also bounced back.
A kick start to the ATVM program
The ATVM program is the one organized by the U.S. Energy Department and the overall value is $25 billion. As of now, this programme has also funded the degraded businesses such as Fisker Automotive, Inc. and the successful ones like Tesla Motors Inc (NASDAQ:TSLA). But the programme was given a pause of four years in order to retool the focus of lending project.
With the Alcoa’s loan, the ATVM project has bounced back in the business. The Energy Department’s Executive Director, Peter Davidson said that this will bring back the ATVM back into the business.
The Failed Loans and ATVM Repute: Will it refurbish?
The financing initiatives to the energy sector as well as the vehicle program were created as an economic stimulus law of 2008. However, with the 2011 complete insolvency of Solyndra LLC as well as failing businesses of Fisker and Vehicle Production Group LLC, these programmes came under grace criticisms. Surprisingly, despite failing the loans, the portfolio of Energy Department of the U.S. performed well. The losses totalled below 3%.
The programme, which was actually adopted as the one with $25 billion amount, still has $16 billion for lending.
In the telephonic conversation with Bloomberg, Peter Davidson said that this was a good number, in comparison to those of Banks’ numbers.
Alcoa Inc (NYSE:AA), being a part of this Government program, said that it will provide encouragement to a transition towards safer and lighter aluminium vehicles.