Ormat Technologies, Inc. has announced that its wholly-owned indirect subsidiary, OFC 2 LLC, and its project subsidiaries, have signed a US$140 million loan to finance the construction of the 30MW McGinness Hills geothermal plant Phase 2 project in Nevada.
The plant is expected to come on line in the first half of 2015, bringing the complex’s total capacity to approximately 70 MW. Ormat is selling energy produced at McGinness Hills to NV Energy under contract through December 2032.
This drawdown is the last tranche under the Note Purchase Agreement with John Hancock Life Insurance Company (USA) and 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.
The US$140 million loan, which matures in December 2032, carries a 4.61% coupon with principal paid quarterly. The OFC 2 Notes, which includes loans for the Tuscarora, Jersey Valley and McGinness Hills complexes, is rated “BBB” by Standard & Poor’s.
Mr. Isaac Angel, CEO of Ormat Technologies, stated:
We are excited to close on this financing and expand capacity at McGinness Hills. The low-risk phased approach to development enables us to secure financing on such attractive terms. With the financing secured, we will be able to free up capital to continue to take advantage of developing opportunities across the globe and enhance returns for shareholders.
On 14 November 2013, Ormat Technologies signed an amendment to the existing McGinness Hills 20 years power purchase agreement (PPA) allowing Ormat to sell 63.7 MW (net average annual capacity) from the complex to NV Energy. Under the amendment, a new energy rate of $85.58/MWh with a 1 percent annual escalator will be set for the entire complex once the Phase II enters commercial operation.
McGinness Hills geothermal plant start operations on 26 July 2012.