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Ormat wins largest ever geothermal deal

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Friday, June 24th, 2011

As reported in IVC: Ormat Technologies will build the Ngatamariki geothermal project in New Zealand for $130 million.

Ormat Industries Ltd. US subsidiary Ormat Technologies Inc. has won a $130 million order in New Zealand – the largest ever in the company’s history. Ormat signed a supply contract and an engineering, procurement and construction, (EPC) contract with Mighty River Power Ltd. for the first stage of the Ngatamariki geothermal project. Construction of the power plant is scheduled to take two years.
Ormat CEO Yehudit Bronicki said, “This marks the largest EPC contract that Ormat has ever entered into for one geothermal plant. Our backlog since the beginning of the year has more than doubled and, as of the beginning of the second quarter, stands at record high of over $230 million. Accordingly, we are increasing our Product Segment guidance for 2011 by approximately 15 percent to between $90 million and $100 million.”

The Ngatamariki geothermal project is a follow-on contract with Mighty River Power and its Maori Trust partner.

New Zealand government-owned Mighty River Power is one of the most experienced geothermal operators in the world. Geothermal energy accounted for a third of its total electricity generation in the first quarter, and the Ngatamariki geothermal project is due to boost that proportion to 43% by 2013.

Ormat Technologies chairman and CTO Lucien Bronicki added, “The completion of this power plant will bring the total installed capacity of Ormat’s technology in New Zealand to approximately 350 megawatts in 14 plants.”

Lucien Bronicki said, “New Zealand is one of the early pioneers in geothermal energy development. For the past forty years, it has been the country with the most consistent policy of support for geothermal energy and has developed advanced expertise in drilling, geophysics, reservoir engineering, as well as operations. New Zealand consulting firms assisted many developing countries such as the Philippines, Kenya and Indonesia in geothermal development. Because of their extensive knowledge, New Zealand companies recognized very early, some 25 years ago, the value of Ormat’s technology and experience in optimizing resource utilization.”

Ormat Technologies‘ share price rose 1.7% in New York yesterday to $20.95, giving a market cap of $952 million, and Ormat Industries’ share price rose 8.1% in morning trading on the TASE today to NIS 21.20, giving a market cap of NIS 2.33 billion.