The move, announced by U.S. Secretary of Energy Steven Chu yesterday, has been described as a "crucial milestone" for the first two out of a total of four solar thermal power plants to be built by Solar Millennium AG, roughly 13 km west of the city of Blythe in California.
The loan guarantee is the precondition for financing around 75 percent of construction costs of the first two 242 megawatt (MW) power plants with borrowed capital from the U.S. Federal Financing Bank. The total investment sum for this first phase amounts to roughly U.S. $2.8 billion; it is estimated that all four phases will come to approximately U.S. $6 billion.
In order to receive the loan guarantees by the U.S. Department of Energy, the project, among other conditions, must conclude a respective general contractor agreement and secure the equity share in total investment. The Executive Board of Solar Millennium is confident all conditions will be met by late summer.
The Solar Trust of America LLC, a unit within Solar Millennium, began construction of the parabolic trough power plants at the end of last year. They are expected to be connected to the grid in 2013 and 2014, respectively. Southern California Edison will then purchase the generated electricity.
The final building permit for all four Blythe power plants has already been granted. Each plant will have a nominal capacity of 250 MW (242 MW net output). It is estimated that all four phases will take around six years to complete.
Christoph Wolff, CEO of Solar Millennium commented: "In times of restrictive public budgets, I am particularly pleased that the U.S. Government is so clearly committed to the energy turnaround, in which our Blythe power plants will have a great share. For us this commitment is the most important prerequisite for entering into successful and detailed negotiations with institutional investors regarding their involvement in the two power plant projects."
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