USA, Arizona:

Financing Geothermal Energy Development (Arizona Geology - blog of the State Geologist of Arizona)

A panel of bankers and investors is at the Governors Geothermal Workshop in Phoenix, Arizona today explaining what the geothermal industry needs to do to finance development of this renewable resource. Lending from financial institutions was represented as much cheaper than selling equity.

Rich Endicott, President of The Biltmore Bank in Scottsdale, told the audience that traditional bank lending (underwriting) expects the primary source of repayment is expected from savings generated by the geothermal system. But lenders also are looking for secondary and tertiary sources to ensure repayment - this may come from equity investors, government guarantees, or the system host for example.

In addition to cash flow, lenders also are looking for secure collateral and evaluating the character of the borrowers and the project. Collateral includes purchase agreements for the energy, long term leases, government performance guarantees and incentives, credit insurance, or assets.

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