Ormat gets loan for Kenya geothermal project

The second phase of the Olkaria power plant came on line last month.

Ormat Industries Ltd. (TASE: ORMT) subsidiary Ormat Technologies Inc. (NYSE: ORA)has obtained a $105 million ten-year loan for its Olkaria geothermal project in Kenya. The refinancing is for the 48-megawatt Olkaria III geothermal power plant in Naivasha, in the Rift Valley in Kenya, owned by Ormat Technologies unit OrPower 4 Inc.

Ormat financed the $150 million construction of Olkaria I and II, as well as the drilling of wells, from its own internal sources. Phase II, completed in December 2008, added 35 MW to the project, bringing it to the target capacity of 48 MW. The electricity generated is sold to Kenya Power & Light Company under a 20-year power purchase agreement.

The present loan will be provided by a group of European Development Finance Institutions (EDFIs) arranged by Deutsche Investitions - und Entwicklungsgesellschaft mbH (DEG). The syndicate also includes Societe de Promotion et de Participation pour la Cooperation Economique, Emerging Africa Infrastructure Fund Ltd., Nederlandse Financierings Maatschappij Voor Ontwekkelingslanden NV, KfW Development Bank, and the European Investment Bank (EIB).

Ormat added that OrPower 4 and the syndicate are finalizing the security documents for the financing, and that the loan would be disbursements in two tranches during the first half of 2009.

Ormat Technologies closed at $31.26 yesterday. Ormat Industries fell 2.5% by midday to NIS 26.50.

Published by Globes [online], Israel business news - www.globes-online.com - on January 8, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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