Home News US’s Ormat Buys 49% Shares of Ijen Project from Medco Power

US’s Ormat Buys 49% Shares of Ijen Project from Medco Power

Ormat Technologies Inc., has signed an agreements to acquire 49 percent of the Ijen geothermal project company in East Java - Photo by Medco Power

JAKARTA (TheInsiderStories) – Ormat Technologies Inc., (NYSE: ORA), has signed an agreements to acquire 49 percent of the Ijen geothermal project company, which is holding the license in East Java, said the company today (07/02). Ijen Project is currently at exploration stage.

The United States’ provider of alternative and renewable energy company bought the shares from local power company PT Medco Power Indonesia (MPI). It said, this acquisition further bolsters Ormat’ global portfolio, and particularly strengthens its position in Indonesia.

Under the terms of the agreements, beside acquire Ijen geothermal project company, the producer committed to additional funding for the project exploration and development, subject to specific conditions.

While, a subsidiary of Medco Power, PT Medco Cahaya Geothermal (MCG), will retain 51 percent ownership in the company. Ormat and Medco will develop the project jointly, said the statement.

“We have established a tremendous relationship with Medco, including partnering on our Sarulla plant, and we are excited to extend this relationship to a second major project in Indonesia,” commented Isaac Angel, Chief Executive Officer.

Indonesia has significant volcanic geology that is reported to have a major part of the world’ potential geothermal resources, estimated at 28,000 megawatts (MW). The government of Indonesia has announced plans to produce more than 9,000 MW of geothermal power by 2025, becoming the world’ leading geothermal energy producer.

This would account for 5 percent of Indonesia’ total energy needs, creating significant opportunities for additional geothermal expansion.

The Ijen project assets, whose final capacity will be determined after exploration, include a geothermal concession and 30-year power purchase agreement for up to 110 MW capacity. The project is ready for exploration and development with some slim holes already drilled and commercial operation is expected at the end of 2022.

While, Ormat owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity.

The company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 2,900 MW of gross capacity. Ormat’ current 910 MW generating portfolio is spread globally in the US, Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe.

Ormat expanded its operations to provide energy storage and energy management solutions, by leveraging its core capabilities and global presence as well as through its Viridity Energy Solutions Inc. subsidiary.

While, MPI through its 100 percent owned subsidiary PT. Medco Cahaya Geothermal (“MCG”) is developing the 110 MW Blawan Ijen Geothermal Power Plant. MCG is entitled for 35-year Geothermal Concession under Ministry of Energy and Mineral Resources decree.

Subsequently, in February 2013 MCG has signed PPA with PT Perusahaan Listrik Negara, an state-owned power company for a 30 years contract. As stated in PPA, theCommercial Operation Date is expected in 2020 – 2021. The project will have 2 x 55 MW power generation and approximately 28 km transmission line to the nearest substation (Banyuwangi Substation).

Written by Staff Editor, Email: theinsiderstories@gmail.com