Nevada Geothermal’s 49.5-MW Blue Mountain “Faulkner 1” geothermal project in northwestern Nevada has been awarded a $98.5 million partial loan guarantee by the U.S. Department of Energy (DOE).
The project consists of a geothermal well field along with fluid collection and injection systems that enable energy to be extracted from rock and fluid below the Earth’s surface. It uses a power plant that converts geothermal energy into electricity. The project has a 20-year power purchase agreement to sell electricity and renewable energy credits to Nevada Geothermal Power, Inc.
The loan guarantee was issued under the DOE’s Financial Institution Partnership Program (FIPP), which is supported by the American Recovery and Reinvestment Act. FIPP is designed to expedite the loan guarantee process for renewable energy generation projects that use commercial technologies. It also helps to expand credit capacity for financing of U.S. renewable energy projects. Nevada Geothermal is the first renewable power development company to complete a loan guarantee through the FIPP.
In a FIPP financing, the DOE provides a partial guarantee for up to 80% of a loan provided to a renewable energy project by qualified financial institutions. John Hancock Financial Services is expected to lend the remaining funds. The blended interest rate for the loan has been determined at 4.14%.
Nevada Geothermal in a statement said that it is continuing development work on Faulkner 1, which already producing 36 to 38 MW (net) currently.
The DOE has now either issued loan guarantees or offered conditional commitments for loan guarantees to support 14 clean energy projects.
Sources: Nevada Geothermal, DOE