NRG Energy has signed a letter of intent with BrightSource Energy to construct, finance, own and operate the 392MW Ivanpah Solar Electric Generating System in the Mojave Desert, California, US.

The US Department of Energy granted a $1.375bn conditional commitment for a loan guarantee for the Ivanpah project to obtain all permits and approvals from federal and California state agencies.

The electricity produced will be sold under multiple power purchase agreements of 20-25 years’ duration with Southern California Edison and Pacific Gas and Electric Co.

The solar field project will be capable of supplying power to 140,000 US homes and reduce 400,000t of carbon emissions annually, thereby supporting California’s goal of 33% renewable power generation by 2020.

Construction of the project has begun and all three phases are expected to be fully operational by mid-2013.