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Ormat signs $310m long-term debt financing for Olkaria III project in Kenya

Olkaria III geothermal plant, Kenya (source: emerging africa fund)
Alexander Richter 27 Aug 2012

OrPower 4, an indirectly wholly owned subsidiary of Ormat Technologies, and the Overseas Private Investment Corp. (OPIC) signed a long-term debt financing of up to $310 million for the Olkaria III geothermal power complex in Naivasha, Kenya.

Ormat Technologies, Inc. (NYSE: ORA) announced in a press release today,  “that OrPower 4, Inc., its indirect wholly owned subsidiary, and the Overseas Private Investment Corporation (OPIC), an agency of the United States Government, signed a Finance Agreement for limited-recourse project financing totaling up to $310 million for the Olkaria III geothermal power complex located in Naivasha, Kenya.

Phase I of the existing power plant commenced commercial operation in 2000 and was incorporated into phase II of the existing power plant in January 2009. Since then, the facility has been in continuous, successful operation.

The OPIC loan is comprised of two tranches aggregating up to $265 million, with a final maturity of approximately 18 years. The loan will be used to pay costs of the existing facility and fund construction and well field drilling for the expansion of the Olkaria III geothermal power complex which could generate up to 84 MW. The Finance Agreement also includes a standby tranche of up to $45 million in the event OrPower 4 elects to construct a further expansion of up to 16 MW.

Disbursements of the OPIC loan are subject to fulfillment of customary conditions precedent for funding, which Ormat expects to satisfy over the next few weeks.
“This loan will enable us to expand the Olkaria III geothermal power complex in order to help meet the electricity demand in Kenya by providing base-load, sustainable geothermal energy,” said Dita Bronicki, Ormat’s chief executive officer. “We appreciate OPIC’s recognition of the importance of this project and their commitment to work with us on this financing. We look forward to a fruitful relationship with OPIC as our lender in Olkaria and elsewhere.”

Source: Company release via Stockhouse