DOE offers conditional commitment offer for a $1.45bn loan guarantee for Abengoa Solar - updated

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The U.S. Department of Energy (DOE) has offered a conditional commitment for a US$1.45 billion loan guarantee to Abengoa Solar. The loan, which was announced by President Obama in his weekly address, will support the construction and start-up of Solana, a 250MW concentrating solar power (CSP) plant in Arizona.

“What the project needs now is for Maricopa County and the state to continue their support and work expeditiously on the last remaining permits needed for construction to begin. After years of watching companies build things and create jobs overseas, it’s good news that we’ve attracted a company to our shores to build a plant and create jobs here in America,” said President Obama.

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DOE’s Title XVII Loan Guarantee program was created to support the deployment of innovative clean energy technologies pursuant to Section 1703 of Title XVII of the Energy Policy Act of 2005 (Title XVII). Title XVII of the Energy Policy Act of 2005 was amended by the American Recovery and Reinvestment Act of 2009 to create Section 1705, a new program for the deployment of renewable energy and electric power transmission projects. Solana is eligible for a loan guarantee under both sections of Title XVII. The plant will be located 70 miles southwest of Phoenix, near Gila Bend, Arizona and will produce enough energy to serve 70,000 households.

Santiago Seage, CEO of Abengoa Solar said, “This conditional guarantee could allow us to start construction of Solana this year. I want to recognize the leadership and effort of the DOE in making Solana possible through this guarantee.”

Abengoa Solar’s Arizona vice president Kate Maracas said, “The building of Solana will also create between 1,600-1,700 new construction jobs, and operation of the plant will add another 85 permanent jobs. These construction and operating jobs will create a few thousand additional indirect jobs. Taken together, 98% of the jobs created by Solana will be American jobs – primarily from Arizona, and a smaller portion from neighboring states.”

Abengoa Solar has signed a power purchase agreement with APS, the state’s largest electric utility, to sell the energy produced by Solana for a period of 30 years.

Update

Obama has also pledged a further US$400m in loan guarantees to Colorado-based Abound Solar, to manufacture advanced solar panels at two new plants, creating more than 2,000 construction jobs and 1,500 permanent jobs. A Colorado plant is already being built and an Indiana plant will be set up in what is now an empty Chrysler factory.

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