Ormat starts operation of Olkaria III extension bringing capacity to 150 MW
Ormat Technologies has announced the start of commercial operations of its Olkaria III extension, adding 11 MW in capacity. This brings the total installed geothermal power generation capacity to 150 MW.
In an announcement in late June 2018, Ormat Technologies Inc. (NYSE:ORA) announced today that the 11 MW Plant 1 expansion project in the Olkaria III complex in Kenya successfully completed its tests and commenced commercial operation on June 2, 2018.
Since 2000, Ormat has developed and expanded the Olkaria III complex in phases and increased its generating capacity from 13 MW to 139 MW by 2016. With the completion of the 11 MW expansion project, the total generating capacity of the complex has reached 150 MW. The scope of the project included drilling of new wells, adding a new Ormat Energy Converter unit, and optimizing other existing units.
The electricity generated from the expanded Plant 1 will be sold to Kenya Power and Lighting Company Limited under the terms of Plant 1 within the Olkaria III complex power purchase agreement (PPA). The new capacity from the expansion is expected to generate average annual revenues of approximately $8 million and to contribute to the Electricity segment performance.
Ormat financed the Olkaria III complex with a $310 million senior secured project finance loan and a $50 million subordinated loan in 2012 and 2016, respectively. Plant 1 expansion was financed by Ormat corporate sources and it is covered under a political insurance umbrella policy from leading global insurers in the private sector to cover exposure to certain political risks involved in operating in developing countries.
“The Plant 1 expansion project demonstrates once again the creativity of our engineering group that analyzed the Olkaria complex operation, equipment and PPA and came up with a plan that enabled us to increase the Olkaria III complex capacity in a short timeframe and at cost effective manner,” commented Isaac Angel, Ormat’s CEO.
“Kenya has a large geothermal potential along the East African Rift,” added Mr. Angel. “Tapping into this potential supports improved access to electricity and also contributes to the economy of Kenya. During peak construction of the Olkaria III Plant 1 expansion, more than 200 workers were hired locally. In addition, several employees were hired permanently and joined the Ormat team in the Olkaria III complex.”
Source: Company release