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US firm Ormat to develop 330MW Indonesia geothermal energy plant

Nevada company Ormat Technologies signs $1.1bn agreement with consortium to construct Sarulla geothermal energy plant in Tapanuli Utara, Indonesia

Geothermal energy in Indonesia
Ormat said the Sarulla consortium expects to start constructing the geothermal energy plant in Indonesia later this year

US firm Ormat Technologies (Ormat) is to develop a 330MW geothermal energy plant in Indonesia. Ormat, which is a geothermal energy firm in Nevada, US, has announced members of the Sarulla Consortium comprising of firms Medco, Itochu, Kyushu and Ormat, have signed a USD 1.1bn project agreement to finance the development and construction of the Sarulla geothermal energy plant in Tapanuli Utara, North Sumatra, Indonesia.

Ormat has signed a USD 254m contract to supply equipment for the geothermal project, which will include its energy converters. The news follows Ormat signing a contract to develop a 60MW geothermal energy project on Indonesia's Sumbawa Island in October 2013.

The Sarulla consortium is expected to start constructing the geothermal energy plant later this year, with the first of three phases set to commence operation in 2016. The remaining two phases are scheduled to be in commercial operation within 18 months of the first phase.

Dita Bronicki, chief executive officer of Ormat Technologies, said: "We are pleased to achieve this significant milestone as scheduled and look forward to continue execution on this exciting new development. We will continue the effort to close this financing and ultimately, supply clean, reliable electricity to the Indonesian market."

The geothermal project will be developed and implemented under a 30-year energy sales contract with Perusahaan Listrik Negara, the national electricity utility company, a 30-year joint operating contract with Pertamina Geothermal Energy, and a 20-year guarantee from the Ministry of Finance. The financing agreements for the 330MW geothermal energy plant were signed with banks including the Asian Development Bank.

Other Western firms involved in geothermal energy projects in the growth markets over the last six months, include Alstom. The French firm announced it will construct a 25MW geothermal power plant in Mexico in November 2013.