June 9, 2011 / 4:20 PM / 8 years ago

UPDATE 1-US DOE offers Ormat $350 mln in geothermal loan aid

* Aid is for three geothermal plants in Nevada

* Nevada Power Company expected to buy the power (Adds details on projects and power purchase agreement)

WASHINGTON, June 9 (Reuters) - The U.S. Energy Department said Thursday it has offered a geothermal project in Nevada sponsored by Ormat (ORA.N) a conditional commitment for up to $350 million in loan aid.

The project is expected to produce 121 megawatts of baseload power from three geothermal power plants in Nevada and to increase geothermal power in the state by nearly 25 percent, the Department of Energy said in a release.

The DOE will provide a partial guarantee for the loan aid for plants in McGinness Hills, Jersey Valley, and Tuscarora.

Ormat Nevada, a subsidiary of Ormat Technologies, Inc, expects the project will create 330 construction jobs and 65 permanent ones.

The power is expected to be sold to Nevada Power Company, under a long-term power purchase agreement.

Energy Secretary Steven Chu said in a release, the project would help the United States maintain its position as the world’s top installer of geothermal capacity.

Under loan guarantees, the federal government agrees to pay portions of private loans in case the company defaults. (Reporting by Timothy Gardner; Editing by Carole Vaporean)

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