The Department of Energy said Friday that it plans to work with the developer of a uranium enrichment project in southern Ohio on research and development to reduce technical and financial risks that have held up a $2 billion loan guarantee.

Enriched uranium is used to produce commercial nuclear fuel.

The loan guarantee application from USEC Inc., which is based in Bethesda, Md., has been pending for the past year.

The government and the developer of the American Centrifuge Plant in Piketon, Ohio, have agreed on a project to test and build a cluster of machines to enrich uranium, Richard Kauffman, senior adviser to the Energy secretary told The Associated Press on Friday.

“We want to be able to demonstrate that the technology would work on a commercial basis,” Kauffman said.

On its website, USEC says the plant will eventually produce about a third of the fuel needed for commercial reactors in the U.S. Nuclear plants provide about 20 percent of the nation’s energy.

The company says it’s invested about $2 billion in the plant so far. Construction began in 2007. Further funding for research and development must be approved by congressional committees.

The DOE says it intends to ask for approval to use existing DOE funds for the first $150 million needed for the first phase of the research program. USEC and its partners would pay for technical verification and building multiple enrichment clusters for the facility. Toshiba Corp. and Babcock & Wilcox Investment Co. have invested in the plant with USEC.

The government’s part of the funding of the research and development would be capped at $300 million.

“When you bring something innovative to the market and are building a factory you want to be sure everything will work on a consistent and practical basis, Kauffman said.

The plant is located about 65 miles south of Columbus, Ohio, the site of a former gaseous diffusion plant that enriched uranium during the Cold War.