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Ormat reports $1.17 bn financial closure of Sarulla project

Indonesia Stock Exchange, Jakarta (source: flickr/ nseika, creative commons)
Alexander Richter 23 May 2014

Ormat reports successful financial closure for the $1.17 billion financing agreement for the 330 MW Sarulla geothermal project in Indonesia, financed by the Japan Bank for International Cooperation, the Asian Development Bank and six commercial banks.

“Ormat Technologies, Inc. (NYSE:ORA) announced today that the Sarulla consortium fulfilled all conditions precedent and reached financial closing allowing the first drawdown under the $1.17 billion financing agreement for the 330 MW project in Indonesia.

In connection with the financial closing, the Company will add $254.0 million to its product backlog related to the Ormat Energy Converters it will supply to the plant. With this addition, Ormat’s backlog increases to $375 million, up from $120 million as of May 8, 2014 (including revenues for the period between April 1, 2014 and today). The Company expects begin recognizing revenues from this contract in the second half of 2014.

The Japan Bank for International Cooperation, the Asian Development Bank and six commercial banks provided the Sarulla project financing, which was announced on March 28, 2014. Ormat holds a 12.75% equity stake in the project, with other equity participants being Medco, Itochu and Kyushu.

Dita Bronicki, chief executive officer of Ormat Technologies, said, “We are delighted to finally get to the final stage of development of this landmark project and move to the construction phase. The fact that Ormat will be supplying equipment to what will be the largest geothermal power plant to date is a testament to the superiority of our technology. We are happy to be able to report a record backlog for our product segment, and more importantly, a backlog with a visibility that provides a base level of products sale for the next 3 years.”

Source: Ormat press release via The Street