Ormat Technologies closed US$105 million long-term debt

Alexander Richter 7 Mar 2009

As announced by the company, Reno-based Ormat Technologies, closed a US$105 million long-term senior debt financing for the Olkaria III geothermal power project in Kenya, Africa.

Ormat Technology’s “wholly-owned subsidiary, OrPower 4, Inc., concluded the closing under its previously announced loan documents for up to $105 million project financing to refinance Ormat’s investment in the Olkaria III geothermal project. The 48 MW power plant is located in Naivasha, Kenya.

The first disbursement of approximately $90 million under the 10-year project finance loan is expected to occur within the next two weeks.

Commercial operation of the Phase II expansion began at the beginning of January and added 35 MW, bringing the project to its target capacity of 48 MW. The project currently accounts for 6% of Kenya’s total energy production. The electricity generated is sold to Kenya Power & Light Company (KPLC) under a 20-year Power Purchase Agreement.

The closing announcement was made during the inauguration ceremony that took place yesterday at the project and was attended by: the Vice President of Kenya, the Minister of Energy, the Permanent Secretary of Energy, Chairman of the ERC, Members of Parliament, other Governmental officials, Representatives of KPLC, local community representatives and of the lender group of European Development Finance Institutions (EDFIs) arranged by Deutsche Investitions- und Entwicklungsgesellschaft mbH (“DEG”).

Vice President H.E. Kolonzo Musyoka said during the ceremony: “The US$150 million injected into the project by Ormat is the largest single private sector investment in the power sector and is consistent with government policy to open the power sector to private participation.” The Vice President concluded: “I am also pleased to note that the green technology used in the Olkaria power plant, will help reduce the cost of electricity and help save the country 120,000 tons of imported oil.”

The Minister of Energy Mr. Kiriatu Murungi said: “At a price of US $29 per barrel of petroleum crude oil, this 48 MW geothermal plant is cheaper to operate than a heavy fuel oil fired plant. This means that at the current oil prices still above US $40 per barrel, OrPower 4 is providing cheaper electricity to the national grid than any existing oil fired plants in Kenya.”

“Having reached the closing of this project finance is a very important and happy day for us,” said Dita Bronicki, Ormat’s CEO.

“I want to thank the Government, the Ministry, the authorities, our customer KPLC, as well as the DEG as lead Consortium and the lenders and last, but not least, the Olkaria III manager Ernest Mabwa, his team and all the Ormat employees,” concluded Dita Bronicki.

Source. Company announcement via PR Newswire