The Nevada Geothermal Power Company (NGP) has received a conditional commitment from the Energy Department for a partial guarantee on a $98.5 million loan from John Hancock Financial Services. Energy Secretary Steven Chu today announced the commitment in a news released June 15, 2010.

The NGP “Blue Mountain” project is a 49.5 megawatt geothermal project to be built in Humboldt County in northwestern Nevada. It includes a geothermal well field, injection system, and fluid collection. Energy will be extracted from fluid and rock beneath the Earth’s surface. A power plant will convert the geothermal energy into electricity.

The Nevada Power Company has a 20-year agreement with the Blue Mountain project to purchase all the electricity and renewable energy credits.

According to Secretary Steven Chu, the United States is the world’s leader in geothermal-based electricity production. So far, there are more than 3,000 megawatts of installed capacity.

“Our support of the Blue Mountain project demonstrates our continued commitment to realize the potential in geothermal so that we can achieve our nation’s clean energy goals,” said Chu.

“Northern Nevada is the Saudi Arabia of geothermal energy and I thank Secretary Chu for recognizing the Silver State’s enormous job-creating potential to produce plenty of clean and affordable energy,” said U.S. Senator Harry Reid.

This is the first project that has received a loan guarantee through the Financial Institution Partnership Program (FIPP). The program is supported by the 2009 American Recovery and Reinvestment Act. Through FIPP, loans are guaranteed for up to 80 percent of the total from approved institutions. Project developers or sponsors must have at least 20 percent of the credit exposure.

The Nevada Geothermal Power Company has four other renewable energy projects in development in Oregon and Nevada. John Hancock Financial Services, a leading institutional energy lender, has financed nine other geothermal projects.

The Energy Department has issued conditional commitments for loan guarantees to support 11 other clean energy projects.