AREVA accepts $2 billion loan guarantee from U.S. Department of Energy to finance uranium enrichment plant
Clients AREVA SA
Jones Day advised AREVA SA, a developer of solutions for carbon-free power generation, in connection with a $2 billion loan guarantee from the U.S. Department of Energy to finance the approximately $3.3 billion construction of the Eagle Rock uranium enrichment plant in Bonneville County, Idaho. The facility is expected to generate more than $5 billion in economic activity in the region, will create 5,000 direct and indirect jobs, and will help fuel 25% of U.S. reactors.
On May 20, 2010, as part of a broad effort to expand the use of nuclear power in the United States and reduce carbon pollution, U.S. Secretary of Energy Steven Chu announced the Department's first conditional commitment for a front-end nuclear facility. The $2 billion loan guarantee will support AREVA's Eagle Rock Enrichment Facility near Idaho Falls, Idaho, with a capacity of 3.3 million separative work units per year, which will supply uranium enrichment services for the U.S. nuclear power industry.
"Increasing uranium enrichment in the United States is critical to the nation's energy and national security," said Secretary Chu. "Existing reactors will need additional sources of enriched uranium soon. New nuclear plants that could start to come on line as early as 2016 will also need a steady, reliable source of uranium enrichment services. AREVA's project will help to meet that demand."
The facility will use advanced centrifuge technology instead of the more energy-intensive gaseous diffusion process, and will be only the second plant to use this technology in the U.S. The project's technology uses 95 percent less electricity than the gaseous diffusion technology it replaces, reducing both energy use and environmental effects.
Before the loan guarantee financing can be closed, the project must obtain a Combined Construction and Operating License (COL) from the US Nuclear Regulatory Commission, which is expected to occur by mid-2011. Construction would begin shortly after AREVA receives the license, and operation of the facility should begin by 2014.