RENO, Nev., May 31, 2018 (GLOBE NEWSWIRE) — Ormat Technologies Inc. (NYSE:ORA) provides an update that on May 30, 2018, due to the approaching lava, the substation of the Puna complex and an adjacent warehouse that stored a drilling rig were burned. Both items are expected to be covered by the Company’s insurance policies. Due to the long lead time of constructing a new substation and the extent of the damage to HELCO’s transmission lines, the Company cannot asses when the Puna complex will be able to resume operation and deliver power to the grid.
The approaching lava also covered and blocked the main access road to the power plant. Alternative access road is currently open.
As announced on May 28, the approaching lava covered the wellheads of two geothermal wells. The Company cannot assess at this stage the extent of the damage to the future functionality of these wells. As of today, the lava did not cover any additional wells. The lava continues to flow and may reach other wells and areas of the Puna facility.
The 38 MW Puna power plant, which is operated by Puna Geothermal Venture GP (PGV), reflects approximately 4.5% of Ormat’s total generating capacity. In 2017, PGV accounted for an aggregate of approximately $11 million of net income and approximately $20 million of Adjusted EBITDA annually. Ormat holds a 63.25% interest in PGV and the balance is held by its partner, an affiliate of Northleaf Capital Partners.
Ormat has property and business interruption insurance policies that include insurance coverage in a combined amount of up to $100 million in the event of volcanic eruptions and earthquake. The Company is working with its insurance broker and has provided notice to its insurance carriers regarding the situation at Puna. As of March 31, 2018, the Puna complex represented approximately $90 million of net assets on the Company’s balance sheet based on a total asset value of approximately $109 million plus approximately $30 million of prepaid expenses less deferred lease income of approximately $49 million. In addition, PGV is required to pay an aggregate of approximately $22 million of future lease payments until 2027.
Any significant physical damage to, or extended shut-down of, the Puna facilities could have a material adverse impact on the power plant’s electricity generation and availability, which in turn could have an adverse impact on our business and results of operations.
ABOUT ORMAT TECHNOLOGIES
With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal Company and the only vertically integrated Company engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. The Company 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. With 77 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 530 employees in the United States and 770 overseas. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 2,600 MW of gross capacity. Ormat’s current 851 MW generating portfolio is spread globally in the U.S., Guatemala, Guadeloupe, Honduras, Indonesia and Kenya. In March 2017, 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, a Philadelphia-based Company with nearly a decade of expertise and leadership in energy storage, demand response and energy management.
ORMAT’S SAFE HARBOR STATEMENT
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see “Risk Factors” as described in Ormat Technologies, Inc.’s Form 10-K filed with the SEC on March 16, 2018.
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
|Ormat Technologies Contact:
VP Corporate Finance and Head of Investor Relations
775-356-9029 (ext. 65726)
|Investor Relations Agency Contact:
Hayden – IR