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Ormat secures $125m project finance loan from OPIC for Honduras geothermal plant

Video screenshot of the Platanares plant from Ormat's website (source: Ormat)
Alexander Richter Alexander Richter 4 May 2018

Ormat Technologies has secured a non-recourse project finance loan of up to $124.7 million for its 35 MW Platanares geothermal power plant in Honduras.

Ormat Technologies Inc. announces that its Platanares project subsidiary and the Overseas Private Investment Corporation (OPIC), United States government’s development finance institution, signed a Finance Agreement to provide a loan (on a non-recourse project finance basis) totalling up to $124.7 million for the 35 MW Platanares geothermal power plant in Honduras.

The OPIC Loan may be funded to Platanares in up to three total disbursements and will have a final maturity of approximately 14 years. The Company expects draw down the loan in two tranches – a first tranche of $114.7 million concurrently with closing, and a second tranche of $10 million within two quarters from closing. Closing and disbursements of the OPIC loan are subject to customary conditions for funding, which Ormat expects to satisfy by the end of the second quarter of 2018. Upon closing, the interest rate on the loan will be determined, and is expected to be between 6.75% and 7.25% based on the current estimates for U.S. Treasury and for the additional spread on OPIC certificates of participation.

“Ormat is proud of its long standing relationship with OPIC, a relationship that commenced with OPIC’s $310 million financing for Ormat’s geothermal complex in Kenya more than five years ago. We appreciate OPIC’s confidence in our technology, operational skills and our focus on bringing  reliable, cost effective renewable geothermal power in emerging markets,” commented Isaac Angel, CEO of Ormat Technologies. “This financing supports OPIC’s mission and will create a sustainable energy solution for the people of Honduras while advancing economic and social development in the region. Ormat is proud to be the developer and the operator of this first privately owned geothermal independent power producer in Honduras, as it was in Kenya and Guatemala before.”

“This project is transformative for many reasons, principally for the reliable energy it will supply to the people of Honduras,” said OPIC President and Chief Executive Officer Ray W. Washburne. “OPIC is proud to support Ormat’s facility which will advance Honduras’ economic prosperity and stability through sustainable energy investment.”

Source: Company press release