Controversial Solar Investment: Global Tensions in Polysilicon Production

The International Finance Corporation (IFC), a branch of the World Bank, has greenlit a substantial $250 million loan and investment for a polysilicon manufacturing initiative in Oman. The approval comes amid objections from the U.S. executive director and abstentions from Germany, the Netherlands, and Nordic countries' representatives on the IFC board.

United Solar intends to construct a $1.6 billion plant in Oman's Sohar Port Freezone, aimed at producing 100,000 metric tons of polysilicon annually. The project's links to China through its chairman, Zhang Longgen, have raised concerns. A subsidiary of Longgen's former company, Daqo New Energy, is currently banned from importing into the U.S. over allegations related to forced labor practices.

The United States remains firmly opposed to this project. A U.S. Treasury spokesperson emphasized the ongoing pursuit of 'America First' principles in international finance discussions. The sector faces issues of oversupply, with Chinese producers reportedly planning major capacity reductions. Despite these tensions, the IFC offers up to $200 million in loans and $50 million in preferred equity investment to the project.