BOISE, IDAHO--(Marketwired - Sept. 30, 2013) - U.S. Geothermal Inc. (NYSE MKT:HTM) (TSX:GTH), a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, announced today that its wholly owned subsidiary, USG Nevada LLC, has entered into a long term project loan agreement with Prudential Capital Group and related entities, for the Phase I San Emidio geothermal project in northwest Nevada.
The loan is for $30.74 million, has a term of just under 25 years, and bears a fixed interest rate of 6.75% per annum. Proceeds from the loan will be used to repay the construction loan, fund project reserves, and pay certain closing expenses. In addition, $2.56 million will be distributed to U.S. Geothermal Inc. and be available for general corporate working capital purposes, including the further development of Phase II at San Emidio.
"Closing this loan, and paying off the $25 million SAIC construction loan, puts all three of our operating projects on stable financial footing going forward", said Dennis Gilles, CEO of U.S. Geothermal. "We welcome Prudential Capital Group as a financial partner at San Emidio and look forward to a long relationship with them."
"We are pleased to provide the permanent financing for the San Emidio project and look forward to evaluating future projects with U.S. Geothermal. This investment reflects yet another example of executing on our strategy of being a consistent capital provider to developers in the North American power industry," said Ric Abel, Managing Director of Prudential Capital Group's Energy Finance Group - Power.
As previously announced, U.S. Geothermal is planning to develop the San Emidio project in two phases: a repower (Phase I) and an expansion (Phase II). Phase I was completed in May of 2012, when the legacy 3.6 MW plant was replaced with a new, more efficient 9 MW power plant that utilizes the existing geothermal fluid flow from the proven area of the reservoir. Phase II requires drilling new production and injection wells, and upgrading transmission to support the increased power production. The Phase II expansion may produce up to 11 MW (net) to fill the full available output allowed under the existing PPA with NV Energy. Pending a successful drilling program and sufficient funding for its development, construction and operation, the Phase II power plant is anticipated to be online in 2015. Phase II drilling is currently underway.
About U.S. Geothermal Inc.:
U.S. Geothermal Inc. is a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy and is operating geothermal power projects at Neal Hot Springs, Oregon, San Emidio, Nevada and Raft River, Idaho. The company is currently developing a second phase project at San Emidio Nevada, as well as El Ceibillo, an advanced stage, steam geothermal prospect located within a 24,710 acre (100sq km) energy rights concession area located 8.5 miles (14 km) from Guatemala City, the largest city in Central America.
The information provided in this news release may contain forward-looking statements within the definition of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements are based on U.S. Geothermal Inc.'s current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described, including but not limited to, the results from the exploration, production and injection well drilling at San Emidio II, whether sufficient funding can be obtained for the development, construction and operation of that project and others, and whether sufficient transmission upgrades at San Emidio II can be obtained . Readers are cautioned to review the risk factors identified by the company in its filings with Canadian and US securities agencies. Forward-looking statements are based on management's expectations, beliefs and opinions on the date the statements are made. U.S. Geothermal Inc. assumes no obligation to update forward-looking statements if management's expectations, beliefs, or opinions, or other factors, should change.
The NYSE MKT and the TSX do not accept responsibility for the adequacy of this release.