Raser Technologies, Inc. (NYSE Arca:RZ) announced today that it has signed a commitment letter with Merrill Lynch for the project financing and tax equity funding for its planned 10 -megawatt (MW) Lightning Dock geothermal power plant in Hidalgo County, New Mexico.
This announcement follows two significant releases last week by the company, which is focused on developing geothermal power plants, as well as an electric drive train for commercial vehicles. Raser announced that it has secured an additional 30,000 acres of geothermal leases, which it will use in its goal to establish 100 MW of new geothermal electricity production each year.
Raser also announced that Wilson Auto Electric has completed field testing of its Symetron technology in preparation for beginning manufacturing and sales of heavy duty alternators employing the technology.
The commitment letter from Merrill Lynch provides for up to approximately $43 million of construction and debt financing and up to approximately $27 million of tax equity capital. Under the commitment, approximately $16 million of the tax equity will be used to pay down the construction debt funding at the time the plant is placed-in-service.
This is the third financing commitment announced under an agreement signed earlier this year that sets forth general terms relating to the structuring and financing of up to 155 MW of Raser’s geothermal power projects.
The plant is designed to generate net 10 MW of electrical power with zero emissions and will use PureCycle® geothermal system technology from UTC Power, a United Technologies Corp. (NYSE:UTX) company and is expected to be online in the first quarter of 2009.
The power plant will be held in a special purpose entity and has an estimated useful life of approximately 35 years. The entity will be responsible for the debt service, all maintenance and operations expenses and various fees and distributions to Raser. Raser will act as engineering, procurement and construction contractor and will guarantee the completion of the construction of the project.
Roy Piskadlo, Managing Director for Merrill Lynch, said, "We are committed to the development of energy resources that are environmentally beneficial and to supporting Raser’s continued progress in executing on its innovative development strategy."
About Raser Technologies
Raser is an environmentally focused technology licensing and development company operating in two business segments. Raser’s Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology and Raser’s SymetronTM technology developed internally by its Transportation and Industrial Technology segment. Raser’s Transportation and Industrial Technology segment focuses on extended-range plug-in-hybrid vehicle solutions and using Raser’s award-winning SymetronTM technology to improve the torque density and efficiency of the electric motors and drive systems used in electric and hybrid-electric vehicle powertrains and industrial applications.
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