Abengoa Surges After Solar-Plant Builder Wins $1.45 Billion Loan Guarantee
Abengoa SA surged the most in six months in Madrid trading after the company won a $1.45 billion loan guarantee from the U.S. government to build a solar-power plant in Arizona.
Shares in the Spanish solar-technology developer climbed 9 percent to close at 18.015 euros. The stock leg gainers on the 88-member benchmark WilderHill New Energy Global Innovation Index, which rose 0.1 percent.
U.S. government backing will allow Seville-based Abengoa to get a cheaper loan, improving the profitability of the power plant, said Nathaniel Bullard, the lead North American solar- energy analyst for Bloomberg New Energy Finance.
“At a narrow spread, less than 100 basis points over Treasury rates, a loan guarantee creates economics simply not possible given finance arranged on the Street or in the City,” Bullard said in an e-mail.
Abengoa’s plant, to be built 70 miles (113 kilometers) southwest of Phoenix, will be the world’s largest solar-power installation, producing 250 megawatts and serving 70,000 families, the company said July 3 in a statement.
The Solana installation, using solar-thermal technology, will prevent 475,000 tons in carbon-dioxide emissions annually, according to the company’s calculations.
The company plans to start construction before year-end and begin generating electricity before the end of 2013, Santiago Seage, chief executive officer of Abengoa’s solar unit, said in a July 3 interview.
To contact the reporter on this story: Todd White at twhite2@bloomberg.net
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