Phase II expansion of the project added 35 MW in December 2008, bringing the project to its target capacity of 48 MW. The electricity generated is sold to Kenya Power & Light Company under a 20 year power purchase agreement.
The 10 year project finance loan for the project of $105 million is to be provided by a group of European Development Finance Institutions (EDFIs) arranged by Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG). In addition to the German DEG, others in the lender group include: Société de Promotion et de Participation pour la Coopération Economique, Emerging Africa Infrastructure Fund Limited and Nederlandse Financierings Maatschappij Voor Ontwekkelingslanden N.V. Furthermore, a portion of the funds provided for the loans will come from KfW Entwicklungsbank (KfW Development Bank) and from the European Financing Partners, a financing vehicle of 13 European Development Finance Institutions and the European Investment Bank (EIB). DEG will also act as global agent for the lender group.
OrPower 4 and its lending group are now finalizing the security documents in support of the financing. Loan proceeds are expected to be paid in two disbursements during the first half of 2009 following fulfillment of certain conditions precedent set forth in the loan documents.
Having completed the second phase of construction at Olkaria III and adding 35 MW of base load capacity in Kenya, Ormat feels rewarded to have reached this significant milestone of signing the main financing documents for the project, said Dita Bronicki, Ormat’s chief executive officer. We appreciate the confidence of Europe’s leading Development Finance Institutions in Ormat and its demonstration of real commitment to Public Private Partnerships in developing Renewable Energy in Africa and in particular, Geothermal Energy Projects in the Rift Valley. We look forward to finalizing the remaining documents for the financing, and to be able to meet the conditions precedent to disbursement and drawdown on the loans as quickly as possible, concluded Dita Bronicki.
We are proud to support Ormat, a distinguished partner with exceptional knowledge and a proven track record. With this project, DEG boosts the utilization of renewable energies in Kenya, a focus country of the German development cooperation, thereby making a significant contribution to climate protection with a signaling effect for the region. Climate protection is an important business area of DEG, as well as private-sector promotion in Africa, said Dr. Winfried Polte, chairman of DEG’s board of management.
