Ormat Technologies: DOE loan Guarantee application
Ormat Technologies, Inc. announced that its subsidiary, Ormat Nevada Inc. ("Ormat Nevada") has mandated John Hancock Life Insurance Company (U.S.A) ("John Hancock") to arrange senior secured construction and term loan facilities under DOE loan Guarantee application of up to $350 million for three geothermal projects currently under construction in Nevada.
The three projects are the McGinness Hills, Jersey Valley and Tuscarora geothermal projects, all located in Nevada. Each of the projects has a 20-year power purchase agreement with Nevada Power Company, a subsidiary of NV Energy. Collectively, the three projects represent between 60 MW and 120 MW of generation capacity, depending on the final assessment of resource feasibility following completion of phase 1 construction and each project's initial operating period. The projects utilize Ormat's proprietary OEC technology, which is installed in approximately 1,300 MW of geothermal power plants and other electricity generating systems around the world. Construction of all three projects has already commenced with commercial operation of the first phase of each project expected between 2011 and 2013.
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").
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. Based on the experience gained so far in the program, the Company expects that this process may take 6 to 12 months to be completed.
"We are delighted that we can continue to expand our work under the FIPP program with a company that is as strong a leader in the US renewable energy industry as Ormat," said John Anderson, Head of Power & Infrastructure Finance at John Hancock.
Dita Bronicki, CEO of Ormat Technologies said: "We are excited about this partnership with John Hancock and the DOE. John Hancock's extensive experience working with DOE financing programs provides Ormat with an excellent opportunity to continue to expand our geothermal portfolio under advantageous financing terms. The DOE 1705 program is a unique funding opportunity for our U.S. projects that not only is cost effective for Ormat, but also allows us to create numerous 'green' jobs."
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 and Peetz; in Guatemala - Zunil and Amatitlan; in Kenya – Olkaria III; and, in Nicaragua - Momotombo.
About John Hancock
The John Hancock Power & Infrastructure Team manages a $15 billion portfolio, of which more than $10 million 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 and Tuscarora under the FIPP program.
Ormat's Safe Harbor Statement
Information 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.
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