UPDATE 2-REC reassures on financing after weak Q1, outlook

* Q1 EBITDA falls 29 pct, lags market consensus

* Cuts 2009 polysilicon production target to 9,000 tonnes

* Says global solar demand to pick up when economy recovers

* Shares rise 4 pct as new CEO boosts confidence

(Recasts with analyst, CEO comments)

By Richard Solem

OSLO, April 29 (Reuters) - Norwegian solar industry group Renewable Energy Corp (REC) (REC.OL) lagged forecasts with a 29 percent drop in core first-quarter earnings on Wednesday, while its shares rose with its CEO calmed concerns about financing.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 527 million crowns ($78 million) in the three months to end-March, below an average forecast of 658 million crowns in a Reuters poll of 14 analysts.

Shares in REC, one of the world's top producers of solar-grade silicon, erased earlier losses to rise 4 percent by 1010 GMT after Chief Executive Ole Enger said the company would find financing solutions in a challenging market.

Demand for solar panels has plunged during the global financial crisis, sending prices for raw materials such as polysilicon tumbling and hurting solar energy component makers such as REC.

REC said it did not expect global solar markets to pick up until the economy recovered, spooking investors who have grown weary of indebted companies with large capex needs whose outlook hinges on a quick return to more normal economic prospects.

Enger, who was speaking at a presentation, moved to reassure investors: "We are in dialogue with banks and have been for many months and I am sure we will find very good solutions going forward."

Enger, a former chairman of REC and head of metal production units at REC's main shareholder Orkla (ORK.OL), replaced Erik Thorsen as chief executive one month ago, after REC botched an expansion of its flagship plant in Moses Lake, Washington.

"Management were pretty convincing. Confidence is slowly coming back," analyst Anders Rosenlund at ABG Sundal Collier said, adding investor expectations were low before the report.

REC said it's underlying financial performance in the second quarter was seen level with the first, and could possibly helped by planned reduction in inventories.

It cut its 2009 polysilicon production view to about 9,000 tonnes from an earlier 10,000-11,000 tonnes, with levels depending on when in the third quarter its Moses Lake plant restarts. REC earlier this month halted production at Moses Lake after 10 days of operations due to start-up troubles.

"The demand for solar modules is currently weak, due to increased economic uncertainty and low availability of financing for new investment," REC said in a statement.

"Overall, REC expects to have roughly the same production capacity available for commercial operations in the second quarter 2009 as in the first quarter," REC said. (Reporting by Richard Solem and Wojciech Moskwa; Editing by Andrew Macdonald)