Geothermal project gains $35mn cash grant

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U.S. Geothermal Inc. (NYSE: HTM, TSX: GTH) said that its subsidiary, USG Oregon LLC, was approved for a $35.9 million cash grant from the U.S. Department of Treasury for the 35 MW Neal Hot Springs geothermal power plant in Oregon. The company will receive $32.7 million in payments because of a sequestration reduction rate of 8.7 percent.

The proceeds of the cash grant will be used to fund $8.5 million in plant and well field cash reserves, while approximately $13.3 million of the grant is expected to pay down the outstanding project loan with the balance to be distributed among equity partners. Enbridge owns a 30 – 40 percent share of the project.

Energy from the new power plant is being sold under the terms of a 25-year power purchase agreement with Idaho Power Co.

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