Solar Millennium Surges After $2.1 Billion U.S. Loan Guarantees Approved

Solar Millennium AG (S2M) rose as much as 11 percent today after the U.S Department of Energy offered a $2.1 billion loan guarantee that will underpin financing for two solar thermal plants in Blythe, California.

The guarantees, offered as conditional commitment by U.S. Secretary of Energy Steven Chu, are the precondition for financing about 75 percent of the construction costs for the first two of four planned solar-thermal plants, Solar Millennium said in a statement last night.

The Erlangen, Germany-based solar thermal technology company surged to as much as 21.65 euros a share, the highest since Dec. 16.

“In times of restrictive public budgets, I am particularly pleased that the U.S. government is so clearly committed to the energy turnaround,” Christoph Wolff, chief executive officer of Solar Millennium, said in the statement.

The Blythe project uses mirrors to concentrate the sun’s energy rather than solar panels that convert light directly into electricity. It’s the world’s largest solar power plant project, according to Solar Millennium.

The company expects to complete the entire financing late in the summer after negotiations with institutional investors, the company said in the statement.

The power plants each have a capacity to produce 242 megawatts and will cost about $2.8 billion in total, according to the statement. Solar Trust of America LLC, Solar Millennium’s Oakland, California-based unit, started building the parabolic trough power plants Blythe 1 and 2, at the end of last year.

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