Ormat extends PPA for plant in Guatemala by additional 15 Years

Zunil geothermal plant, Guatemala (source: Ormat)

Alexander Richter 22 Jan 2014

Ormat Technologies, Inc. (NYSE: ORA) announced today its indirect, wholly owned subsidiary signed an amendment to the power purchase agreement (PPA) with Instituto Nacional de Electrificacion (INDE) for its Zunil geothermal power plant in Guatemala. The amendment extends the term of the PPA from 2019 to 2034.

The PPA amendment also transfers operation and management responsibilities of the Zunil geothermal field from INDE to Ormat for the term of the amended PPA in exchange for a tariff increase. Additionally, INDE exercised its right under the PPA to become a partner in the Zunil power plant with 3% equity interest.

Zunil geothermal power plant was built by Ormat and started operation in 1999. Currently the power plant generates approximately 50 % of its installed capacity due to lack of sufficient geothermal resource supply. Ormat plans to improve the heat supply to gradually increase generation, subject to monitoring and assessment of the geothermal reservoir. Ormat expects this improvement will increase the energy portion of revenues, which are paid based on actual generation.

Dita Bronicki, chief executive officer of Ormat said, “We are proud to have the opportunity to improve the performance of the Zunil power plant and extend the PPA term of the project for an additional 15 years. This supports our confidence in Guatemala’s economy and the potential of the Zunil geothermal field. The hard work and dedication of our plant’s operation team, consisting entirely of skilled local employees, combined with our experienced geothermal resource development team will ensure the sustainable operation of additional clean, base-load power to Guatemala’s grid.”

Source: Company release