Areva applies for federal loan guarantee for Eagle Rock facility 

Global energy giant Areva submitted the second and final part of its loan guarantee application to the Department of Energy Dec. 2, asking for the federal government to guarantee $2 billion in loans to finance its proposed Eagle Rock uranium enrichment facility near Idaho Falls.

“We consider this a critical step in the project, and we believe we’ve submitted a very strong application,” said Areva spokesman Jarret Adams, adding that the loan guarantee “more important in this (economic) environment than it would be under normal circumstances.”

The loan guarantee program is designed to encourage investment in new nuclear energy projects, including reactors and projects on the “front-end” of the nuclear fuel cycle like enrichment and conversion facilities.

Part one of the application was submitted in September and included an overview of the Eagle Rock project, financing strategies and plans for meeting schedule milestones. Part two covered facility engineering; construction, operating and business plans; and an assessment of the company’s credit-worthiness.

In the latest round DOE offered $18.5 billion in loan guarantees for reactors but received applications from 17 companies totaling $122 billion. The agency provided a total of $2 billion for front-end facilities, and received two applications for $2 billion each – one from Areva and one from fellow nuclear power company USEC.

“It could mean that they split the money, or that it could be allocated just to one or neither,” Adams said. Congress may even decide to increase the amount, he added.

Adams said submission of the loan guarantee application clears the way for Areva to apply for licensing from the Nuclear Regulatory Commission, which the company plans to do before the end of this month. Areva said it hopes the commission will complete its licensing review within two-and-a-half years of the filing.

Ground could be broken on the $2 billion Eagle Rock facility as early as 2011, with operations commencing in 2014. Areva plans to employ 250 full-time workers at the operational site and 1,000 during construction.

“Things are moving along according to schedule on our end,” Adams said. “We’re moving forward with the licensing application… that’s a huge step in the project.”

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