The U.S. Department of Energy on Tuesday announced a conditional commitment to provide a partial guarantee for a $98.5 million loan by John Hancock Financial Services to the Nevada Geothermal Power Company (NGP) for a 49.5 megawatt (MW) geothermal project in Humboldt County in northwestern Nevada.
The NGP Blue Mountain project has a 20-year power purchase agreement to sell electricity and renewable energy credits to Nevada Power Company.
NGP’s Blue Mountain project and John Hancock Financial Services are the first to access a Department of Energy (DOE) loan guarantee through the Financial Institution Partnership Program (FIPP), a program supported by the 2009 American Recovery and Reinvestment Act.
In a FIPP financing, DOE provides a guarantee for up to 80% of a loan provided to a renewable energy project by qualified financial institutions. These long-term lenders apply on behalf of the project sponsors or developers and are required to hold at least 20% of the credit exposure to the project, aligning their interests with DOE and project sponsors.
FIPP was designed to expedite the loan guarantee process for renewable energy generation projects that use commercial technologies and to expand credit capacity for financing of U.S. renewable energy projects.
Nevada Geothermal Power Company is a renewable energy development company with four other projects in development in Nevada and Oregon.
Earlier this week, U.S. Geothermal Inc. (NYSE Amex: HTM) was offered a conditional commitment for a $102.2-million loan guarantee from the DOE to construct the 22-MW power plant at Neal Hot Springs in Eastern Oregon.
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