On September 7, 2010 Energy Secretary Steven Chu announced the issuance of the first loan guarantee under the Department of Energy’s (DOE) Financial Institution Partnership Program (FIPP). The DOE issued the partial guarantee for a $98.5 million loan being made by John Hancock Financial Services to a subsidiary of the Nevada Geothermal Power Company (NGP) in respect of the 49.5 megawatt Blue Mountain geothermal project (PDF) located Humboldt County in Northwestern Nevada. The blended interest rate for the loan was determined at 4.14%.
NGP was the first renewable energy company to receive a loan guarantee issued under the FIPP program created by the American Recovery and Reinvestment Act of 2009. The FIPP program is designed to expand the credit capacity for financing of renewable energy generation projects in the United States that use commercial technologies. In a FIPP financing, the DOE provides a partial guarantee of up to 80 percent of a loan provided to a renewable energy project by a qualified financial institution.
The Blue Mountain project consists of a geothermal well field and fluid collection and injection systems that enable energy to be extracted from geothermal substances and converted into electricity. The Faulkner 1 geothermal plant has a 20-year power purchase agreement with NV Energy. The project has been touted by Humboldt County, Nevada Administrator Bill Deist for its “positive impact on [the] local economy and … excellent fit within the Winnemuca region. It has created important, long term employment opportunities.”
The conditional commitment for the Blue Mountain project was announced on June 15, 2010. Latham & Watkins LLP represented NGP in the financing of the Blue Mountain Project.