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Polaris announces favourable changes to PPA

Alexander Richter Alexander Richter 23 Dec 2008

Canadian Polaris Geothermal Inc. announced that its Nicaraguan subsidiary, Polaris Energy Nicaragua S.A. (PENSA) has signed an addendum to the existing Power Purchasing Agreement between the company and the energy distributor in Nicaragua.

Canadian Polaris Geothermal Inc. announced that its Nicaraguan subsidiary, Polaris Energy Nicaragua S.A. (PENSA) has signed an addendum to the existing Power Purchasing Agreement between the company and the energy distributor in Nicaragua.

The changes include, a tariff increase by 50% to 9.2 US$ cents/ kWh (for all power generated beyond present 10 MW level, which is sold at 6.1 US$ cents until 2013), the term has been extended from 20 to 25 years, amount of electricity to be purchased has increased from 66 MW to 72 MW, and additional provisions providing for increases in the 9.2 US$ cents/ kWh tariff in the event that construction financing costs increase above certain defined levels.

The implementation of those amendments also include changes to the generation license, which were extended from20 to 30 years and also extended the existing San Jacinto-Tizate geothermal concession from 20 to 25 years. The company believes that those changes provide help to facilitating project finance for the San Jacinto-Tizate project and also triggers the final steps for completing the loan syndication and drawdown process being led by the Central American Bank for Economic Integration (CABEI) for the company’s Phase I MCT 24 MW expansion.

Source: Marketwire/ msnbc.com, Company release