Ormat Technologies Inc. (NYSE: ORA) has announced that an Ormat subsidiary will acquire a geothermal project from Geotermica Platanares that is being developed in Honduras.
The project comprises of the rights to a field where exploration work has been conducted in the past and a Power Purchase Agreement (PPA) for up to 35 MW with the national utility of Honduras, ENEE.
Upon fulfillment of certain conditions precedent and the closing of the transaction, Ormat will become the owner of all project assets, including wells, land, the PPA and necessary permits to develop a geothermal project. Once the well field is fully appraised and the power plant is constructed, Ormat will hold the assets under a Build, Operate and Transfer (BOT) structure for approximately 15 years.
The Platanares project is the first geothermal project in Honduras and is regulated by Honduran law to promote the generation of electric energy by renewable resources, which was enacted in October 2007. Under this law, the project benefits from a joint payment guarantee of the government of Honduras and ENEE for power produced and from an income tax exemption during the first 10 years of operation.
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