RENO, Nev., Sept. 24, 2011 /PRNewswire/ -- Ormat
Technologies, Inc. (NYSE: ORA) today announced that its
wholly-owned indirect subsidiary, OFC 2 LLC, and its project
subsidiaries ("Ormat"), have finalized and signed the loan
documentation for a 20-year loan for up to $350 million under a financing with John Hancock
Life Insurance Company (USA).
The transaction will be guaranteed by the U.S. Department of
Energy's Loan Programs Office in accordance with and subject to the
Department's Loan Guarantee Program under Section 1705 of Title
XVII of the Energy Policy Act of 2005.
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The financing will support clean, sustainable power generation
from three geothermal power facilities located in the State of Nevada, which are scheduled to be
built in two phases and expected to generate up to 113 MW of power.
The capacity of the first phase is expected to be up to
approximately 60 MW.
The second phase development is subject to the feasibility
assessment of the geothermal resource, which will be performed
following completion of the first phase of each facility, and
fulfillment of other conditions in the loan documents.
The three Nevada-based
facilities - Jersey Valley, Tuscarora and McGinness Hills - will provide
clean and baseload power through 20-year power purchase agreements
with Nevada Power Company, a subsidiary of NV Energy. Construction
of the Jersey Valley power plant is substantially completed, while
the field development is ongoing. Commissioning of the first
phase of the Tuscarora and
McGinness power plants is expected in 2012.
In anticipation of the closing, the Company had previously
entered into several rate lock transactions, as insurance against
an increase in the 10-year Treasury Rate, until the funding date of
the loan. These transactions did not qualify for hedge accounting.
While precise figures are not yet available, the Company
expects that if the Treasury Rate remains at its current historic
low levels through September 30,
2011, the date on which its rate lock transactions
mature, it will incur a pre-tax loss of approximately $17 million, which will adversely affect the
financial results of operation in the third quarter of 2011.
$4.7 million of this amount has
already been recognized as a pre-tax loss by the Company in the six
months ended June 30, 2011.
Dita Bronicki, CEO of Ormat Technologies, said, "Support from
the 1705 program enables us to expand our geothermal portfolio in
the U.S. under financing terms for the two-phase structure of the
Project that we would otherwise not obtain in the private markets.
Over the long term, we consider this loan to be a favorable
financing instrument which will decrease our financing costs. We
appreciate the Loan Programs Office leadership and expertise during
its careful and thorough review of our application and are thankful
to John Hancock Life Insurance Company (USA) for its support of geothermal development
that will bring additional baseload and reliable capacity to the
national grid."
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 80 U.S. patents. Ormat has engineered and built power plants,
that it currently owns or has supplied to utilities and developers
worldwide, totaling approximately 1370 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,
Jersey Valley, 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.
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 February 28, 2011.
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.
Ormat Technologies
Contact:
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Investor Relations
Contact:
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Dita Bronicki
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Todd Fromer / Rob
Fink
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CEO
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KCSA Strategic
Communications
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775-356-9029
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212-896-1215 (Todd) /
212-896-1206 (Rob)
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dbronicki@ormat.com
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tfromer@kcsa.com
/ rfink@kcsa.com
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SOURCE Ormat Technologies, Inc.