Ormat secures US$310m loan for Olkaria III refinance and expansion
Ormat Technologies subsidiary, Ormat International, Inc., signed a commitment letter issued by the Overseas Private Investment Corporation ('OPIC') to provide project financing of up to $310 million, to refinance and expand Ormat's 48 MW Olkaria III geothermal complex located in Naivasha, Kenya.
In a release by the company, “Ormat Technologies, Inc. (NYSE: ORA) announced that its wholly-owned subsidiary, Ormat International, Inc., signed a commitment letter issued by the Overseas Private Investment Corporation (‘OPIC’) to provide project financing of up to $310 million, to refinance and expand Ormat’s 48 MW Olkaria III geothermal complex located in Naivasha, Kenya.
Under the agreed term sheet attached to the commitment letter, the loan will be comprised of a refinancing tranche of up to $85 million to prepay the existing loan and fund transaction costs, a construction loan tranche of up to $165 million to finance the construction of an additional 36 MW expansion currently underway, and a $60 million stand-by facility to finance an additional optional 16 MW capacity expansion, that, if exercised by Ormat, could bring the total capacity of the complex to approximately 100 MW.
The maturity dates of the construction tranche and the refinancing tranche are expected to be June 2030 and December 2030, respectively. The maturity and certain other terms of the stand-by facility will be finalized following Ormat’s decision to exercise the option to construct the additional 16 MW expansion.
Financial closing is targeted to occur during December 2011, subject to (among others) successful negotiation of the loan documentation, completion of due diligence by OPIC and fulfillment of certain conditions precedent to be agreed upon in the loan documents.
Dita Bronicki, CEO of Ormat Technologies said, ‘This financing marks one of the largest project finance loans obtained by Ormat, and demonstrates OPIC’s confidence in our technology and operational skills, evidenced by our successful track record of over a decade with the Olkaria III Geothermal complex. We thank OPIC for their confidence in Ormat and their support of U.S. investments in nurturing development in Africa’.
Mrs. Bronicki continued, ‘We are very happy with our long-standing involvement in the Kenyan power sector, as the first renewable IPP in Kenya and probably in all of Africa. The expanded project will provide the Kenyan people more reliable, clean and cost effective power.’
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical world challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC supports U.S. investment in emerging markets worldwide, fostering development & the growth of free markets.”
Source: Company release via PR Newswire