U.S. Geothermal signs $30 million loan agreement for San Emidio
U.S. Geothermal Inc. subsidiary USG Nevada has entered a long term loan agreement for $30 million for the Phase 1 San Emidio geothermal project in the state of Nevada with Prudential Capital.
Announced last week, development company U.S. Geothermal Inc. has – through its wholly owned subsidiary, USG Nevada LLC – entered into a long term project loan agreement with Prudential Capital Group and related entities, for the Phase I San Emidio geothermal project in northwest Nevada.
The loan is for $30.74 million, has a term of just under 25 years, and bears a fixed interest rate of 6.75% per annum. Proceeds from the loan will be used to repay the construction loan, fund project reserves, and pay certain closing expenses. In addition, $2.56 million will be distributed to U.S. Geothermal Inc. and be available for general corporate working capital purposes, including the further development of Phase II at San Emidio.
“Closing this loan, and paying off the $25 million SAIC construction loan, puts all three of our operating projects on stable financial footing going forward”, said Dennis Gilles, CEO of U.S. Geothermal. “We welcome Prudential Capital Group as a financial partner at San Emidio and look forward to a long relationship with them.”
“We are pleased to provide the permanent financing for the San Emidio project and look forward to evaluating future projects with U.S. Geothermal. This investment reflects yet another example of executing on our strategy of being a consistent capital provider to developers in the North American power industry,” said Ric Abel, Managing Director of Prudential Capital Group’s Energy Finance Group – Power.
As previously announced, U.S. Geothermal is planning to develop the San Emidio project in two phases: a repower (Phase I) and an expansion (Phase II). Phase I was completed in May of 2012, when the legacy 3.6 MW plant was replaced with a new, more efficient 9 MW power plant that utilizes the existing geothermal fluid flow from the proven area of the reservoir. Phase II requires drilling new production and injection wells, and upgrading transmission to support the increased power production. The Phase II expansion may produce up to 11 MW (net) to fill the full available output allowed under the existing PPA with NV Energy. Pending a successful drilling program and sufficient funding for its development, construction and operation, the Phase II power plant is anticipated to be online in 2015. Phase II drilling is currently underway.”
Source: Company release via Wall Street Journal