Was it planned/
The news release of 09/04/2008 describing the TCW $180 Million, 14%, 15 year loan said a 0.5% fee was paid to a director of NGP acting as an adviser. I don't know if such is normal, but it is certainly suspicious. TCW later transferred the loan to EIG..
Also see the 11/24/2008 news release concerning BM-1 PPA with NV Energy in which the dollar value of the PPA was not given. Production and sales indicated the PPA started at about ~$78, before 1% annual increases which we learned later was a part of the PPA. I recall reading that Geothermal PPA's in Nevada average over $100 per MW in a NGP report.
A large portion of the funds to support BM-1's construction came from US Government Grants and a Federal Loan Guarantee through the U.S Department of Energy (DOE). At the time of the TCW loan there was no concrete evidence that the $180 Million loan would be lowered by US Government Assistance. At the loan date with consideration of non US Government Assistance, the P & I for the TCW loan would have amounted to ~$29.3 Million annually, while BM-1 even if operating at the projected 41 MW net and receiving a PPA of ~$78 per MW/h would have had sales of ~$27.6 Million before considering operating and other expenses.
In my opinion a reputable lender would not have provided NGP -a small company- with a $180 million loan knowing that it could not be payed, especially considering the possibility of non Government Assistance.
The high interest TCW, now EIG loan and the low NV Energy PPA made it difficult for NGP to pay the now EIG loan. That, plus the focus on the last GeothermEX estimate which indicated a fall in production by 2020 and then NGP's steep fall in price since 05/11/2011 to less than a penny per share because of that loan.
So now, BM-1 a Power Plant that has provided well over 30,000 homes with 750kWh monthly since its going on line is being given to EIG a multi billion dollar firm.
One might say “heck” EIG will take BM-1 back to its earlier planned capacities and the Government will be off the hook, Is it a scheme to get a solid asset? Who cares about the possibility that taxpayer money was used to get BM-1 started if it gets on par with irs preliminary production estimate(s) or that NGP shareholders have been effected.
Three items, the high interest rate loan, the low PPA and the GeothermEx estimate should be checked closely along with their possible timing as both the taxpayers and NGP shareholders have been effected.