$330 million for three geothermal projects currently under construction in California and Nevada.
Ormat Technologies, Inc. (NYSE: ORA) announced today that its subsidiary, Ormat Nevada Inc. (“Ormat Nevada”) has engaged John Hancock Life Insurance Company (U.S.A.) (“John Hancock”) to arrange senior secured construction and term loan facilities under a DOE loan guarantee program of up to $330 million for three geothermal projects currently under construction in California and Nevada.
The three projects are the Mammoth CD-4 and Wister geothermal projects located in California and the Deadhorse Wells geothermal project located in Nevada. These projects are in various stages of development and PPA negotiations and collectively are expected to generate between 80 and 90 MW that are scheduled to come on line during 2013. The three projects will utilize Ormat’s proprietary OEC technology, which is installed in over 1,300 MW of geothermal power plants and other electricity generating systems around the world.
The term sheet contemplates that, subject to final documentation, proceeds of the credit facilities will be drawn against milestones during the construction period for each project with the last draw occurring upon commercial operation. The availability of the credit facilities is subject to various conditions, including execution of mutually satisfactory documentation and approval of the United States Department of Energy (“DOE”) and the Office of Management and Budget (“OMB”).
John Hancock will act as the Lender Applicant under the Financial Institution Partnership Program (“FIPP”) that is supported by Section 1705 of the American Recovery and Reinvestment Act of 2009. Under this program, the DOE can provide a loan guarantee for up to 80% of loans provided to certain qualified renewable technologies. Ormat Nevada and John Hancock have submitted Part I of the loan guarantee application to the DOE. The process will continue with the DOE and John Hancock’s due diligence, followed by a conditional commitment for the financing, completion of documentation and closing of the financing.
Dita Bronicki, CEO of Ormat Technologies said: “This is our second portfolio of projects that we are submitting with John Hancock under the DOE Loan Guarantee program. The first application covers 3 projects in advanced stages of construction: Jersey Valley, McGinness Hills and Tuscarora, all located in Nevada. These new projects are part of the implementation of our growth program which is expected to increase Ormat’s generating portfolio by approximately 40% to approximately 750 MW by the end of 2013. John Hancock has been a valued partner to work with and we are excited for this opportunity to expand our, already strong, working relationship together. The DOE 1705 financing program provides favorable financing terms and we hope to benefit from this unique opportunity. ”
About Ormat Technologies
Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. The Company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat products and systems are covered by 75 U.S. patents. Ormat has engineered and built power plants, that it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1300 MW of gross capacity. Ormat’s current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States – Brady, Brawley, Heber, Mammoth, Ormesa, Puna, Steamboat, OREG 1, OREG 2, OREG 3 and OREG 4; in Guatemala – Zunil and Amatitlan; in Kenya – Olkaria III; and, in Nicaragua – Momotombo.
About John Hancock
The John Hancock Power & Infrastructure Team manages a $16 billion portfolio, of which more than $10 billion is invested in the US power industry. John Hancock has been working with the Department of Energy on the Section 1705 FIPP program for financing renewable energy since the stimulus bill was signed in February 2009. John Hancock is pleased to have been the first financial institution to submit a loan application under this program, the first financial institution to receive a conditional commitment under the program, and Ormat’s partner for financing McGinness Hills, Jersey Valley, Tuscarora as well as Ormat’s new portfolio of projects under the FIPP program.
Ormat’s Safe Harbor StatementInformation provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see “Risk Factors” as described in Ormat Technologies, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 8, 2010.
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.