WASHINGTON, July 18 (Reuters) - The U.S. Energy

Department said on Thursday it is offering a conditional loan

guarantee of up to $861 million for two utility-scale

solar-energy projects in Puerto Rico that are expected to boost

energy security after recent hurricanes severely damaged the

U.S. territory's grid.

The conditional commitment from the department's Loan

Programs Office goes to Clean Flexible Energy LLC, to finance

construction of two solar photovoltaic farms equipped with

battery storage and two standalone battery energy storage

systems, the LPO said. The projects will be built in the coastal

communities of Salinas and Guayama in south Puerto Rico.

The projects comprise 200 megawatts of photovoltaic solar

panels and up to 285 MW of stand-alone battery energy storage

capacity. The solar arrays will power about 43,000 homes, it

said.

Clean Flexible Energy is an indirect subsidiary of AES Corp ( AES )

and TotalEnergies Holdings USA Inc, and

managed under a joint-venture agreement.

Jigar Shah, the LPO's director, said the projects will

include new assemblies developed by AES ( AES ) and solar energy

innovator 5B that are easy to quickly flatten should a hurricane

threaten.

The "technology basically allows you to put these units on

the ground in record time," Shah said in an interview. "So when

you find out a hurricane is coming through, you can put these

units on the ground, and then that makes them less susceptible

to missile damage, which is the biggest challenge in a hurricane

when things are blowing around, it really destroys a lot of

projects."

AES ( AES ) said it had no comments beyond those of the LPO.

Shah said the advanced systems should be more easily

insurable and be a model for solar power across the Caribbean

and other places vulnerable to heavy storms.

Hurricane Maria severely damaged Puerto Rico's grid in 2017

and between 3,000 and 4,600 people died in the aftermath. Among

the worst-hit communities were ones with elderly and low-income

people. In some mountain towns, the power was out for 11 months.

The territory's grid was hammered again in 2022 by another

storm.

Besides financing aid, the Energy Department also has a

$1-billion Puerto Rico Energy Resilience Fund that President Joe

Biden signed into law in late 2022 to supply rooftop solar

panels to the territory. On Thursday it announced a $325-million

funding opportunity for solar and battery systems expected to be

built in places such as health and treatment centers and common

areas within multi-family housing properties.