Ormat cancels DOE loan guarantee application for 3 projects
Ormat Technologies announces cancellation of DOE loan guarantee application for three projects in California and Nevada in coordination with John Hancock as a lender and is now exploring commercial financing.
In a release, “Ormat Technologies, Inc. (NYSE: ORA) announced today that its subsidiary, Ormat Nevada Inc. (“Ormat”), decided not to proceed with the Part II of the DOE loan guarantee program application for Wister, CD-4 and Dead Horse Wells geothermal projects, currently under construction in California and Nevada. The decision was made in coordination with John Hancock Life Insurance Company (U.S.A.) (“John Hancock”) relative to the pending application for up to $330 million in DOE funding. Ormat has decided to explore commercial financing for the projects in lieu of DOE support.
Under the guidelines of the Financial Institution Partnership Program (“FIPP”) supported by Section 1705 of the American Recovery and Reinvestment Act of 2009, projects backed by the program must have all the permits necessary for the projects by September 2011. The decision by Ormat and John Hancock to remove the projects from the application was due to uncertainties in the permitting process and the transaction costs associated with the program.
The Jersey Valley, McGinness Hills and Tuscarora projects, all located in Nevada, are covered under a separate DOE application that is in process. Ormat expects to secure financing for these three Nevada projects under the FIPP program before the program expires.”
Source: Company release via PR Newswire