Ormat Industries Ltd. (TASE: ORMT) subsidiary Ormat Technologies Inc. (NYSE: ORA) and its partners in Indonesia's 330-megawatt Sarulla geothermal project have signed $1.17 billion financing agreement with the Japan Bank for International Cooperation and the Asian Development Bank (ADB). The two banks head a six-bank syndicate and the ADB is the implementing bank for the Clean Technology Fund and the Canadian Climate Fund.
When the financing is closed in the second quarter of 2014, the consortium will begin construction with the first phase to commence operation in 2016. The remaining two phases are scheduled to be in commercial operation within 18 months of the first phase.
Ormat will supply $254 million worth of its Ormat Energy Converters for the project in northern Sumatra. The order will be added to the company's backlog, and it will recognize the income over 3-4 years starting in the third quarter of 2014. In addition, Ormat unit Ormat International Inc. owns 12.75% of the Sarulla project. Its partners in the consortium are Indonesia's Medco Energi Internasional Tbk (Jakarta( MEDC) and Japan's Itochu Corporation (TSE: 8001) and Kyushu Electric Power Co. Inc. (TSE: 9508).
The Sarulla project has a 30-year energy sales contract with Indonesia's national electricity utility Perusahaan Listrik Negara, a 30-year joint operating contract with Pertamina Geothermal Energy, and a 20-year guarantee from the Ministry of Finance.
Published by Globes [online], Israel business news - www.globes-online.com - on March 30, 2014
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