Geothermal Company Acquires Over 120 MW

Ormat Nevada, announced that its subsidiaries were successful in an auction for all the geothermal assets of Covanta Energy Corporation, an unrelated third party. Covanta Energy Corporation filed for bankruptcy protection in April 2002. The US Bankruptcy Court for the Southern District of New York, which has jurisdiction over Covanta’s Chapter 11 case, has approved the purchase agreement.

Sparks, Nevada, December 19, 2003 [] Ormat’s bid for US$214M (including a deposit of $40M) was declared the “best and highest”, and Ormat was approved as the winner on November 21, 2003. Ormat is committed to completing the acquisition before December 31, 2003. The assets included in the sale are the following: – 100 percent ownership in the Heber Geothermal power plant, having a nameplate capacity of 52 MW and located near Heber in Imperial County, Southern California. – 100 percent ownership in the lessee position of the SIGC geothermal power plant having a nameplate capacity of 48 MW, adjacent to the Heber Geothermal plant, and – 50 percent ownership interest in the 40 MW Mammoth Geothermal power plant, located near the city of Mammoth, Mono County, California. All the above power plants have long-term power purchase agreements with Southern California Edison for the sale of electricity until 2015-2022. The expected revenues from sale of electricity for all the above assets is approximately $80 million per year, according to Ormat. In order to finance the acquisition, on November 14, 2003 an ORMAT subsidiary received a loan commitment from a US bank for an amount of approximately $155 million secured by the acquired assets. The acquisition of these geothermal assets, along with the completion of the acquisition of the Steamboat Nevada geothermal assets currently under way, will bring the total geothermal power plants owned and operated by ORMAT and its subsidiaries in the USA to over 250 MW, with an additional 30 MW under development in Nevada.

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