Ormat closes financing and first drawdown for Olkaria III extension
Ormat Technologies subsidiary OrPower has completed the financial closing and first drawdown on $310 million project financing from Overseas Private Investment Corp. (OPIC), a U.S. government agency.
In a release this morning, Ormat Technologies announced “that OrPower 4, Inc., its indirect wholly owned subsidiary, has completed the financial closing of a previously announced limited-recourse project financing totaling up to $310 million for the Olkaria III geothermal power complex located in Naivasha, Kenya, with the Overseas Private Investment Corporation (OPIC), an agency of the United States Government.
On November 9, 2012, OrPower 4 Inc. received a disbursement of $85 million representing the full amount of Tranche I of the OPIC Loan, and a disbursement of $135 million from Tranche II of the OPIC Loan. The remaining amount of up to $45 million of Tranche II of the OPIC Loan is expected to be drawn over time prior to the commercial operation date of the Olkaria III expansion which is expected mid-2013, subject to customary conditions precedent.
Until commercial operation of the Olkaria III expansion, the interest rate on the OPIC loan proceeds is variable and reset weekly. The interest rate for the initial reset period is 2.94% per annum.
A third Tranche of the OPIC Loan in an amount of up to $45 million could be borrowed in the event that Ormat elects to construct an additional phase of up to 16 MW, subject to the requirements of the OPIC Loan documents.
“We appreciate OPIC’s commitment to expand the Olkaria III geothermal complex up to 100 MW that will provide reliable, base load, cost effective power to Kenya,” said Dita Bronicki, Ormat’s chief executive officer. “We hope to be able to continue to work together with OPIC on additional international projects generating clean renewable energy. The OPIC support for these projects enables us to obtain long term cost effective project financing, improve their economics and strengthen our balance sheet,” noted Ms. Bronicki.