The company has signed a letter of intent with Kenya Power & Lighting Co. Ltd (KPLC) for expansion of the Olkaria III power plant by up to 52 MW within the framework of the existing power purchase agreement (NYSEARCA:PPA).
The expansion is to be developed in two phases. Phase I comprising of 36 MW within 3.5 years from finalizing the amendment to the existing PPA with an option for phase II comprising of 16 MW within 4.5 years from commercial operation of phase I. The amendment to the existing PPA is subject to applicable governmental approvals and the consent of the lenders that provided the financing to the existing power plant.
The Olkaria III plant is located in Naivasha, Kenya and is comprised of two phases. The first phase of approximately 13 MW commenced commercial operations in August 2000 and the second phase of approximately 35 MW commenced operation in January 2009. The development and construction of the existing plant was funded by the Company’s own equity and upon commercial operation of the second phase, the Company has refinanced its investment through senior secured project finance loan from a group of European Development Finance Institutions arranged by Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG).
“Kenya is a proven and significant resource for geothermal energy, and it is our belief that the proposed expansion will provide Kenya with much needed renewable, dependable and cost-effective electricity,” Dita Bronicki, CEO of Ormat Technologies, said.
Earlier this month Ormat announced technical difficulties that are limiting the output of a new geothermal power plant in California.
Disclosure: no positions