Trader looks at market graph 311 (R).
(photo credit: REUTERS/Tony Gentile)
Ormat Industries US subsidiary Ormat Technologies has signed two major loans for
geothermal projects in the US and Kenya.
In the US, the company has
obtained a 20-year loan for up to $350 million from John Hancock Life Insurance
Company, to finance the construction of three geothermal power stations for the
generation of 113 megawatts Jersey Valley, Tuscarora and McGinness Hills in
Nevada. The loan is guaranteed by the US Department of Energy’s Loan Programs
Office under Article 1705 of Title XVII of the 2005 Energy Policy
The first stage of these projects is due to generate up to 60
megawatts of electricity, and the second stage is subject to a feasibility study
after the first stage at each project is completed.
The first stage of
the Tuscarora and McGinness power plants is due to come on line in 2012. They
will sell electricity to NV Energy Inc. subsidiary Nevada Power Company under
20-year power purchase agreements.
In Kenya, the US government’s Overseas
Private Investment Corporation obtained a letter of commitment to provide a $310
million loan to refinance and expand the 48-megawatt Olkaria III geothermal
complex located in Naivasha to 100 megawatts. Ormat expects to close the
financing in December.
Commenting on the Olkaria project, Ormat
Technologies CEO Yehudit Bronicki 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. [This is] the first renewable
independent power project in Kenya and probably in all of
Commenting on the Nevada loan, Bronicki said, “Support from the
1705 program enables us to expand our geothermal portfolio in the US. Over the
long term, we consider this loan to be a favorable financing instrument which
will decrease our financing costs.”