Abengoa SA will apply for a loan from the U.S. Treasury Department’s Federal Financing Bank after President Barack Obama said the company will get $1.45 billion in government guarantees to build a solar plant in Arizona.
“As it is considered an innovation project, we can apply for financing from” the Federal Financing Bank, said Santiago Seage, Chief Executive Officer of Abengoa Solar, the unit that got the guarantees, in an interview today. The loan may have a maturity of around 20 years, he said.
The plant, 70 miles (113 kilometers) southwest of Phoenix, will produce 250 megawatts and will serve 70,000 families, the Seville-based company said in a statement today. Solana, as the plant will be named, will prevent 475,000 tons in carbon-dioxide emissions annually.
Terms of the loans from FFB, as the Treasury unit is known, “are more attractive than comparable transactions with banks,” said Seage, declining to provide details of pricing before the process is completed. The government can finance as much as 80 percent of the project under its rules, he said.
Obama today announced $1.85 billion in loan guarantees to build solar-powered facilities in the U.S. that he said will create thousands of jobs. The guarantees will come from the $862 billion economic stimulus program enacted early last year.
Seville-based Abengoa plans to start construction of the Arizona plant before yearend and electricity production will begin there in the autumn 2013, Seage said.