Gerlach geothermal plant wins financing
Nailing down a private bridge loan last week allows U.S. Geothermal to complete the first phase of its San Emidio geothermal plant near Gerlach without having to tap into equity markets to finance construction, says Saf Dhillon, manager of investor relations.
Boise-based U.S. Geothermal secured a $9 million bridge loan from Ares Capital Corporation of New York. U.S. Geothermal is expected wrap up construction and bring the 8.6-megawatt San Emidio project online in December, Dhillon says.
Approximately 30 percent of the total $30 million construction costs are funded under a grant by the Department of Energy, Dhillon says. That money would be paid to U.S. Geothermal about 60 days after the facility goes into commercial energy production. The cash grant will be used to pay back Ares Capital, he says.
“Now we don’t have to do an equity financing and issue more stock. It allows us to monetize this cash grant up front and avoid waiting four months to receive funds.”
Under the loan agreement U.S. Geothermal will receive initial funding of $7.5 million and subsequent funding of $1.5 million when the plant comes online.
The 8.6-megawatt San Emidio power plant has been under construction since August 2010. SAIC Constructors, a subsidiary of Science Applications International Corporation is building the facility and also provided construction financing for the project. The new power plant replaces an existing 3.6-megawatt plant.
Phase II of the 19.9-megawatt project is expected to go on line in the 3rd quarter of 2013.
Heather Ashbridge, who started with Nevada State Development Corporation in 2008, previously served in several roles with the organization, including assistant vice president and loan officer. She is based in NSDC’s Reno office.