President Obama Announces a Conditional Commitment Offer for a $1.45 Billion Federal Loan Guarantee for Abengoa Solar Inc.

Sat Jul 3, 2010 7:29am EDT

* Reuters is not responsible for the content in this press release.

* Loan proceeds will be used for the construction of the Solana project
(Solana), the largest concentrating solar power (CSP) plant in the world. 
* Federal stimulus advances Solana toward construction.

WASHINGTON, D.C.--(Business Wire)--
President Obama announced today in his weekly video address that DOE has offered
a conditional commitment for a $1.45 billion loan guarantee to Abengoa Solar,
Inc. The loan will support the construction and start-up of Solana, a 250 net
megawatt (MW) concentrating solar power (CSP) plant in Arizona. 

"After years of watching companies build things and create jobs overseas, it`s
good news that we`ve attracted a company to our shores to build a plant and
create jobs here in America," said President Obama. 

Solana will include six hours of molten salt thermal energy storage capability,
which will allow energy to be dispatched as needed during cloudy periods and
after sunset. With this capability, Solana will be able to generate electricity
well into the evening to help meet the summer peak demand. The plant will be
located 70 miles southwest of Phoenix, near Gila Bend, Arizona. Solana will
produce enough energy to serve 70,000 households and will prevent the emission
of 475,000 tons of CO2 per year compared to a natural gas burning power plant. 

DOE`s Title XVII Loan Guarantee Program was created to support the deployment of
innovative clean energy technologies pursuant to Section 1703 of Title XVII of
the Energy Policy Act of 2005 (Title XVII). Title XVII of the Energy Policy Act
of 2005 was amended by the American Recovery and Reinvestment Act of 2009 to
create Section 1705, a new program for the deployment of renewable energy and
electric power transmission projects. Solana is eligible for a loan guarantee
under both sections of Title XVII. 

Santiago Seage, CEO of Abengoa Solar, said that "this conditional guarantee
could allow us to start construction of Solana this year. I want to recognize
the leadership and effort of the DOE in making Solana possible through this
guarantee." Mr. Seage also added that Solana is in a very advanced stage of
development and permitting, having received most of its authorizations from
local, county, and state authorities. Recently, DOE conducted an Environmental
Assessment study and issued a finding of no significant impact (FONSI) for the
project. "What the project needs now is for Maricopa County and the state to
continue their support and work expeditiously on the last remaining permits
needed for construction to begin," said Abengoa Solar`s Seage. 

The construction and operation of Solana will bring many economic and
environmental benefits to Arizona and will support the nation`s goals for energy
independence through a "green" economy. The plant will create significant tax
income for local communities and the state over the life of the project. Abengoa
Solar`s Arizona Vice President Kate Maracas stated that "the building of Solana
will also create between 1,600-1,700 new construction jobs, and operation of the
plant will add another 85 permanent jobs. These construction and operating jobs
will create a few thousand additional indirect jobs. Taken together, 98% of the
jobs created by Solana will be American jobs - primarily from Arizona, and a
smaller portion from neighboring states." 

Abengoa Solar signed a power purchase agreement with APS, the state`s largest
electric utility, to sell the energy produced by Solana for a period of 30
years. "APS has demonstrated a strong commitment to solar energy and has shown
leadership in moving solar energy toward the mainstream," said Maracas. 

Abengoa Solar has made it a priority to utilize U.S.-made components wherever
possible for the Solana plant. More than 75% of the equipment and supplies
required to build Solana will be manufactured in the U.S. These include steam
generators, heat exchangers, power equipment, glass, steel, concrete and other
construction materials. 

As a direct consequence of the construction of Solana, a mirror manufacturing
factory will be built in Surprise, Arizona. The mirror factory will employ
almost 180 people, adding to the number of direct jobs created by Solana. This
new facility will provide Arizona with the foundation upon which to expand its
solar energy technology manufacturing capabilities and to support future CSP
projects. 

From an environmental perspective, Solana will provide Arizonans with clean,
pollution-free and greenhouse gas free energy while, at the same time reducing
Arizona's need for fossil fuel based generation facilities, eliminating the
emission of nearly a half-million tons of carbon dioxide per year. These
reductions will contribute to state goals for renewable energy deployment as
well as national targets for climate change abatement. 

In late 2009 Abengoa Solar signed a power purchase agreement in California to
supply electricity generated by a 250 MW CSP trough plant located in the Mojave
Desert, 100 miles northeast of Los Angeles. The company also has several
projects under development in the Southwest. Abengoa Solar is currently building
350 MW of solar plants worldwide, and with an additional 142 MW already
operating, it is the only company worldwide building and operating both trough
and power tower CSP plants. The Solana plant will be Abengoa Solar`s tenth CSP
plant worldwide. 

About Abengoa Solar. 

Abengoa Solar focuses its activity on the development and application of
technologies for generating electrical power from the sun. Headquartered in
Denver, Colorado, Abengoa Solar Inc. has offices in Arizona, California, and
Washington, DC and currently employs around 95 highly qualified people. Abengoa
Solar Inc. develops large scale solar power plants using parabolic trough, power
tower, and photovoltaic technologies. The company also owns and operates several
smaller industrial solar systems in the southwestern U.S. and conducts extensive
research and development activities in collaboration with NREL (National
Renewable Energy Laboratory) and DOE. (www.abengoasolar.com). 

About Abengoa. 

Abengoa is a technology provider that applies innovative solutions for
sustainability to the infrastructure, environmental and energy sectors. The
company is present in more than seventy countries, operating through its five
business units: Solar, Bioenergy, Environmental Services, Information
Technologies, and Industrial Engineering and Construction (www.abengoa.com). 

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RenewComm
Peter Kelley, 202-270-8831
peter@renewcomm.com

Copyright Business Wire 2010

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