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U.S. Department of Energy measure will boost investor confidence in the $2 billion plant.
The long wait is over for Areva. The U.S. Department of Energy has offered a conditional commitment for a $2 billion loan guarantee to AREVA to facilitate financing of its Eagle Rock Enrichment Facility planned for development near Idaho Falls, Idaho. The conditional commitment was offered through DOE’s Loan Programs Office.
For its part, Areva was ecstatic.
“AREVA is elated by this decision which will enable us to continue development of our Eagle Rock facility in Idaho and contribute to rebuilding America’s energy infrastructure so we can produce more CO2-free electricity,” said Jacques Besnainou, CEO of AREVA North America. “AREVA has considerable experience building and operating enrichment facilities and is putting that experience to work with the Eagle Rock project.”
Speaking to the Idaho Falls Post Register Bob Poyser, Areva's vice president in charge of Idaho Falls operations, said of the loan guarantee. "It's a great step forward for us. It'll give us the ability to go out and get financing for the project."
Areva has said repeatedly that the construction of the $2 billion facility would be "difficult if not impossible" if the loan guarantee was not offered for the plant.
Last week Areva executives told a conference call of nuclear bloggers the parent firm was selling a 15% stake in the company to Mitsubishi and the sovereign wealth fund of the state of Qatar.
Areva plant will use proven technology
Areva’s Eagle Rock facility will use the same gas centrifuge technology already installed by URENCO in the Eunice, NM, uranium enrichment plant which will begin operations in June.
Like its counterpart in New Mexico, when operational, the Eagle Rock plant will produce about 25% of the enriched uranium needed to fuel the nation’s 104 operating nuclear reactors.
DOE loan guarantees are not grants but provide a federal backstop that enables companies to invest in clean energy projects, including smart grids, renewable and nuclear energy projects.
The decision to award the loan guarantee is based on a rigorous due diligence process. It assesses financial and technical factors. The project must satisfy certain conditions before the loan guarantee can be issued, including the receipt of the NRC license and state permits.
AREVA submitted a license application to the Nuclear Regulatory Commission in December 2008 to build the Eagle Rock plant at a site 18 miles west of Idaho Falls. If approved, construction on the 3.3 million SWU (separative work units). The license is expected in mid-2011.
The plant's construction phase is estimated to create 1,000 jobs in eastern Idaho. The plant would also employ 300-400 workers to run it.
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