CINCINNATI (AP) The United States’ only provider of enriched uranium for nuclear power plants said it will go ahead with development of a southern Ohio project even though it has been unable to attract financing in the $3.5 billion venture.

USEC Inc., based in Bethesda, Md., is developing the American Centrifuge project on the site of a former gaseous diffusion plant in Piketon, approximately 80 mi. (130 km) east of Cincinnati.

The centrifuge technology is considered more efficient for concentrating the fissionable uranium isotope U235.

“The market for our enrichment product remains strong with improving prices, and we like the prospect for growth in our industry,” CEO John Welch said when USEC announced its third-quarter results on Nov. 4.

But in a companion announcement about progress at Piketon, Welch conceded that work may depend on whether USEC gets the $2 billion Department of Energy-guaranteed loan it has applied for.

“We do not believe public market financing for a large capital project such as the ACP is available to us, given current financial market conditions,” Welch said. “We view the DOE loan guarantee program as the path for obtaining the debt financing to complete the American Centrifuge project.”

In February, USEC said the Piketon cost would be more than double the original estimate five years ago and $1.2 billion more than just a year earlier. USEC expected the plant will begin operation in late 2009, and have 11,500 centrifuge machines — each approximately 40 ft. tall — running in 2012.

In September, it awarded a $1 billion contract to Fluor Corp. of Irving, Texas, for engineering, procurement and construction.

Company spokeswoman Elizabeth Stuckle said Nov. 7 that USEC was counting heavily on the DOE loan to improve its chances of finding investors and keeping the project on schedule.

“If we do not receive a loan guarantee — which we expect to — it could slow down our deployment,” Stuckle said.

USEC still believes it can begin commercial operation by the end of the first quarter of 2010, and have full deployment by the end of 2012, she said.

French-owned Areva Inc., also based in Bethesda, Md., is competing with USEC for the DOE-guaranteed loan, Stuckle said. Areva has applied for regulatory approval to build a uranium enrichment plant in Idaho to come on line in 2014.

If the government-guaranteed loan is not approved in the final weeks of the Bush administration, it could be advanced when President-elect Barack Obama takes office in January. While campaigning in southern Ohio in August, Obama said the Piketon site workforce and surrounding communities “will play a central role in our nation’s domestic energy supply through private sector and government initiatives.”

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