OrPower 4, a subsidiary of Ormat Technologies has inked a finance agreement with the Overseas Private Investment Corporation (OPIC), a US government agency to secure $310m for the development of the Olkaria III geothermal power complex located in Naivasha, Kenya.
The limited-recourse project financing will be disbursed in two tranches of $265m and a standby tranche of $45m.
OrPower 4 will use the loan to fund construction and well field drilling activities for the expansion of the Olkaria III geothermal power complex will increase the facility's capacity to 84MW.
In addition, the company will use the loan to pay existing facility's costs.
The first tranche has a final maturity of about 18 years and the second tranche will be disbursed, if OrPower 4 intends to expand the facility by the addition of 16MW capacity.
Ormat chief executive Dita Bronicki said the company will use the proceeds from the loan to expand the Olkaria III geothermal power complex in order to help meet the electricity demand in Kenya by providing base-load, sustainable geothermal energy.
"We appreciate OPIC's recognition of the importance of this project and their commitment to work with us on this financing," said Bronicki.
"We look forward to a fruitful relationship with OPIC as our lender in Olkaria and elsewhere."
Loan disbursement is subject to fulfilment of customary conditions precedent for funding, the company said.
OrPower 4 anticipates the conditions to be fulfilled over the next few weeks.
Ormat Technologies designs, develops, owns and operates geothermal and recovered energy-based power plants.
Image: The $310m loan will be used for the Olkaria III geothermal power complex expansion in Kenya. Photo: Pseudopanax.