Ormat closes financing for Kenya geothermal project

The project currently accounts for 6% of Kenya's total energy production.

Geothermal energy developer Ormat Technologies Inc. (NYSE: ORA) wholly-owned subsidiary OrPower 4, Inc., closed the financing agreement for a plant in Naivasha, Kenya.

The Olkaria III geothermal project, after adding 35 MW in an expansion in January, is a 48 MW power plant. The electricity generated is sold to Kenya Power & Light Company (KPLC) under a 20-year Power Purchase Agreement.

The project currently accounts for 6% of Kenya's total energy production.

The first disbursement of approximately $90 million under the 10-year project finance loan is expected within the next two weeks. The lender group of European Development Finance Institutions (EDFIs) was arranged by Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG).

Kenya vice president H.E. Kolonzo Musyoka said during ceremony marking the inauguration of the project, "The $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 p resident added, "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."

Shares Ormat Industries Ltd. (TASE: ORMT) subsidiary Ormat Technologies rose 0.3% on Friday to $23.29, giving it a market cap of $1.06 billion.

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

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

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