Ormat Technologies and PT Medco Power Indonesia have signed a $100 million financing deal with an Indonesian bank for the development of the Ijen Geothermal Power Plant through a jointly owned subsidiary in which Ormat Technologies would own 49% of the equity.
Ormat Technologies, which specializes in building and operating geothermal power plants, will develop the first geothermal power plant in East Java. The Ijen power plant will be constructed in phases. The first phase, which is anticipated to cost $250 million, will produce 34 megawatts per year. The generated electricity will be sold under a 30-year agreement with Indonesia’s electrical company. The power plant is expected to generate approximately $25 million in revenue each year.
Ormat’s CEO, Doron Blachar, commented, “This signing is another step to support Indonesia’s economy towards clean renewable energy and another step in Ormat’s long-term plan to increase its presence in the country both as a geothermal power plant owner and as an equipment supplier.”
“The signing of these two contracts increases our backlog to approximately $150 million, the highest since 2020, and should provide a significant contribution to our expected revenues and margins. This contract demonstrates our full and long-term relationship with our clients and evidences our proven technology. Ormat’s technology is designed to accommodate a wide range of geothermal reservoirs while maintaining maximum flexibility and efficiency. We anticipate delivery and construction for these projects during 2023 and 2024,” said Doron Blachar.