Idaho firm seeks $102M loan for geothermal plant in Oregon
A photo of the Neal Hot Spring site in Malheur County, Ore., for the U.S. Geothermal Inc. website. By JOHN MILLER Associated Press WriterBOISE, Idaho (AP) — An Idaho-based geothermal energy developer said Thursday it's closer to getting a federal loan worth up to $102.2 million to build a 22-megawatt power plant in the eastern Oregon desert. U.S. Geothermal Inc. of Boise still must fulfill U.S. Department of Energy conditions before tapping the loan for its $120 million Neal Hot Springs project in Malheur County, Ore., 90 miles west of Boise. The loan would come from the Department of Treasury and has a lower interest rate than if the company had sought the cash from private lenders.
CEO Daniel Kunz said access to traditional capital from skittish investors and lenders for small, renewable-energy projects like his remains difficult even two years after the 2008 financial markets crisis. He's hoping the DOE's offer to guarantee the loan, provided the company meets certain milestones, will shore up confidence that the plant will be completed. "The people who really value this kind of energy will realize that this pioneer company has access to capital," Kunz said.
U.S. Geothermal shares, which had lost more than half their value over the last year, rose 15 cents, or 21 percent, to 85 cents following Thursday's announcement.
The Energy Department said Thursday this is the first such loan guarantee it has offered to an innovative geothermal power project under provisions of the Energy Policy Act of 2005. But it has made similar guarantee offers to other projects, like a $2 billion uranium-enrichment facility that France-based Areva Inc. is building near Idaho Falls. U.S. Geothermal already has a 10-megawatt power plant near Malta in southern Idaho, part of a partnership with banker Goldman Sachs. The Neal Hot Springs project in Oregon is due to be completed in 2012. Once it's done, the company is counting on a separate, $34 million federal tax rebate — money that's part of the 2009 federal stimulus act meant to help spur investment in renewable energy — to help pay down the federal loan as well as pay off some private investors. U.S. Geothermal already has a 25-year pact to sell electricity from Neal Hot Springs to Idaho Power Co., a contract Kunz forecasts will generate some $20 million in revenue annually. Elected officials including Idaho Gov. C.L. "Butch" Otter, a Republican, and U.S. Sen. Ron Wyden, D-Ore., were optimistic the project will fulfill conditions to get the federal loans. "The announcement today helps make commercial development of geothermal energy at the Neal Hot Springs a reality. This is good news for Oregon and the environment," Wyden said in a statement Thursday. In addition to this project, U.S. Geothermal is expanding a 3.6-megawatt power plant in Nevada and in April was awarded a geothermal energy rights concession in Guatemala.
Copyright 2010 The Associated Press. |
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February 9, 2012
- Coos Bay / North Bend, Oregon
