Sarulla Consortium, which includes Medco, Itochu, Kyushu and Orma, has signed a $1.17bn project financing agreements with Japan Bank for International (JBIC) and Asian Development Bank (ADB) for geothermal project in Indonesia.
The consortium will use the funding to develop and build the 330MW Sarulla geothermal project in Tapanuli Utara of North Sumatra in the country.
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The financing, which is expected to complete in the second quarter of 2014, is subject to fulfillment of certain conditions.
Once the financing process is completed, the consortium plans to begin the construction activities at the project with the first phase to be operational in 2016.
The consortium intends to complete the remaining two phases and start commercial operation within 18 months, after commissioning of the first phase.
Ormat, which holds a 12.75% equity stake in the Sarulla project through its subsidiary Ormat International, will provide energy converters to the project, under the $254m supply contract.
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By GlobalDataThe project will get support from the national electricity utility company Perusahaan Listrik Negara with a 30-year energy sales contract, Pertamina Geothermal Energy with a 30-year joint operating contract and a 20-year guarantee from the Ministry of Finance.
Ormat Technologies CEO Dita Bronicki said the company has achieved significant milestone as scheduled and look forward to continue execution on this exciting new development.
"We are appreciative for the hard work of the many parties that were involved in getting these agreements signed," Bronicki added.
