Ormat partnership inks financing agreement for geothermal in Indonesia

US-based alternative energy company Ormat Technologies Inc (NYSE:ORA) said on Thursday that it has signed a financing agreement for the development of the Ijen geothermal power plant project in Indonesia through a local partnership.

Ormat and PT Medco Power Indonesia (Medco Power) teamed up to form a subsidiary company PT Medco Cahaya Geothermal (MCG) that will develop and operate the power plant in East Java. The project sponsors secured support under the financing agreement with Indonesian state-owned non-bank financial institution PT Sarana Multi Infrastruktur (Persero), Ormat said.

The joint company MCG will develop the geothermal project in stages, with the first bringing 34 MW in 2025. Medco Power holds a 51% stake in MCG, with Ormat holding the remaining 49%.

Once in operation, the Ijen facility will be the first geothermal power plant in East Java.

Ormat is present in Indonesia’s geothermal sector through a minority stake in the 330-MW Sarulla power plant in North Sumatra.

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