If approved, the loan will cover 80% of the projected $106mn total capital cost of the binary cycle power plant and related infrastructure, the company says.

US Geothermal hopes to have the plant, which is designed to deliver 22MW of power to the electrical grid, on line in late 2011.

The DOE loan is anticipated to be a combined construction and long term loan and provide the project with a low cost annual interest rate, according to Daniel Kunz, chief executive of US Geothermal.

"Another critical milestone in the development of our project at Neal Hot Springs has been achieved and provides us with access to a source of low cost capital," says Kunz.

The expected DOE funding will come from the agency’s Energy Efficiency, Renewable Energy and Advanced Transmission and Distribution Solicitation loan guarantee program.

In February, US Geothermal signed an interconnection agreement for the Neal Hot

Springs project with Idaho Power Company (IPC) that includes design and construction of an electrical transmission line and substation.

The new 10.3 mile line will connect the project with IPC’s grid and is being designed for 36MW of transmission capacity. IPC estimates $3.2mn construction cost of the new connection.

Kunz says US Geothermal is negotiating a long-term power purchase agreement for the Neal Hot Springs project but did not say with whom.