Ormat Technologies, a U.S.-based holding company, has announced a deal to build a geothermal project in Indonesia using technology developed in Israel, The Times of Israel reported.
Ormat signed a $1.17 billion financing agreement with an Indonesian group that is building the huge 330-megawatt Sarulla plant to generate electricity in Tapanuli Utara, North Sumatra, Indonesia.
Israel does not have diplomatic relations with Indonesia, the world’s most populous Muslim country.
Financing is expected to be finalized by the second quarter of 2014, and construction of the project is expected to begin in 2016. Eighteen months later, said Ormat, the plant should be operational. Ormat will supply the energy converters for the project, worth $254 million. The contract to build the plant was signed in 2007.
The Sarulla project, as it is known, is a multi-national effort. It’s being managed by a consortium including Indonesian energy company Medco, Japanese conglomerate Itochu, and the Indonesian subsidiary of Japan’s Kyushu Electric Power, along with Ormat, which owns 12.75% of the project.
The financing is being done by the Japan Bank for International Cooperation (JBIC) and the Asian Development Bank (ADB), serving as the lead structuring banks, along with six commercial banks, the Clean Technology Fund and the Canadian Climate Fund. Electricity produced by the plant will be sold to Indonesia’s national electricity utility company, Perusahaan Listrik Negara, under a 30-year contract.
Ormat is one of the biggest in the business, building geothermal power plants around the world, with 1,100 employees, 600 of them in the U.S., and operating in 24 countries around the world.