Ormat Systems-Sunday Energy in joint venture for solar energy in Israel
22 October 2009
Geotyhermal energy recovery technology provider Ormat Technologies Inc has announced a tie-up between its Israeli subsidiary Ormat Systems Ltd and privately held Israeli solar power firm Sunday Energy Ltd to develop, construct and operate 36 MW capacity solar-photovoltaic energy systems in Israel.
The joint venture represents the company's commercial entry into the solar energy market and its first major commitment to the solar photovoltaic market in Israel.
Under the agreement, Sunday will contribute the rights to all its property and roofs required to develop solar energy systems above 1MW to special purpose entities (SPEs) which will be 70 per cent owned by Ormat and will be under its control.
The agreement will allow Ormat and Sunday to act jointly as the EPC contractor and the operator of each project in accordance with each company share in the SPEs.
The capital expenditure for 36 MW of solar power systems is estimated at approximately $195 million and the electricity generated from the projects will be sold to Israel Electric Corporation Ltd under long term purchase agreements.
The long-term power purchase agreements (20 years) are expected to generate approximately $30 million in annual revenues. The SPEs expect to finance their capital expenditure with 80 per cent Non-Recourse project finance debt.