Geothermal capacity additions are on track to top 100 MW in 2012, making this year one of the best for geothermal deployment in the last decade [1,2]. This could be a tentative sign that conditions have been improving for geothermal finance (traditionally, finance has been one of the principal barriers to the technology’s wider adoption). Projects coming online this year have demonstrated some creativity in leveraging financial opportunities. Here are some highlights.

Commercial Lenders may be Revisiting Geothermal Asset Finance

One particularly notable project for geothermal finance was the 49.9-MW John L. Featherstone plant (formerly Hudson Ranch I), which began commercial operation in the Salton Sea, California area in March.  According to Project Finance magazine, Featherstone was the first utility-scale geothermal facility in the United States since the 1980s to secure debt for construction finance from commercial lenders, a class of investor that has typically shied away from geothermal project finance [3,4]. The debt deal featured a club of banks, and amounted to about $300 million, about 75% of project costs. It is structured as a five-year, mini-perm, which equity holders plan to refinance in the capital markets [4].

via Drilling for Dollars: Notable Developments in Geothermal Finance | Renewable Energy Project Finance.