US$1.2 billion DOE loan guarantee offered to Abengoa for 280MW project

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The US Department of Energy (DOE) has offered a conditional loan guarantee totalling US$1.2 billion to help build a 280MW Concentrating Solar Power (CSP) plant in southern California. If confirmed, the DOE guarantee will help fund the construction and start-up of Abengoa’s Mojave Solar Project (MSP), which is to be located around 100 miles northeast of Los Angeles in San Bernardino County.

Construction of MSP is scheduled to get underway in August and although it will not be operational until the summer of 2014, Abengoa has already signed a 25-year power purchase agreement to sell the electricity generated to Pacific Gas & Electric (PG&E). In addition to the 1,200 direct and indirect jobs created by the US$1.6 billion development, the plant will create significant tax income for local communities and the state over the lifetime of the project.

The domestic solar sector will also benefit from Abengoa’s decision to prioritise the use of US-made equipment on the system; more than 80% of the components and supplies required to build MSP, including power equipment and construction materials will be manufactured inside the US.

In the face of rising costs and falling PV prices, several CSP projects have been abandoned recently. However, MSP is the second CSP system Abengoa has secured financing for – it also obtained a US$1.45 billion loan for a 250MW project in Maricopa County, Arizona – and US Energy Secretary Steven Chu still believes the technology has a key role to play in solar's future.

“By investing in the commercial-scale deployment of solar technologies, we can create greater efficiencies that will lower the cost of solar power while creating jobs and increasing our global competitiveness in this key industry,” Chu said.

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