Deal Reached for Nordex to Pay Back $2.5M in Incentives

by Arkansas Business Staff  on Friday, Aug. 30, 2013 1:56 pm  

A wind turbine manufactured by Nordex. (Photo by Nordex)

Nordex USA has reached an agreement with the state of Arkansas and the city of Jonesboro to repay more than $2.5 million in grants it received to build its wind turbine manufacturing plant.

Arkansas Business reported this week that a deal to repay the grant was imminent after Nordex announced it would stop production at its Jonesboro plant and thus would not be able to meet promised employment goals.

Nordex will consolidate its turbine manufacturing at facilities in Germany but keep the Jonesboro site, according to a press release from the Arkansas Economic Development Commission.

The Jonesboro facility will serve Nordex as its American base for service and warehousing and the Nordex Academy for training staff and customers.

"Nordex has been a dedicated partner in moving wind manufacturing forward and creating Arkansas jobs.  Unfortunately, that dedication has not been shared by the United States Congress, which repeatedly fails to establish a long-term policy for wind energy," Gov. Mike Beebe said in the release.  "But even now, under these unfortunate circumstances, Nordex continues working with Arkansas to ensure that taxpayer incentives are properly repaid. Hopefully, the U.S. government will act more pragmatically in the future and Nordex will again ramp up production in Jonesboro."

According to AEDC, $3.91 million from the Governor’s Quick Action Fund was paid out for the project -- $2.51 million for site preparation, a training facility and training expenses, and $1.4 million to Jonesboro for rail and road work which remain as infrastructure improvements. 

Nordex will repay $2.31 million to the state and $204,814 to the city. Nordex has already repaid $263,000.

"We receive a lot of questions about clawbacks," said AEDC director Grant Tennille. "The process works, and in this case rather quickly. When it happens that we need to use clawbacks, we will negotiate keeping the unique circumstances of every project in mind."

With this agreement, all draws against the committed Quick Action Funds stop and the balances will be used for future projects, AEDC officials said.

 

 

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