Financing Geothermal Projects in the Capital Markets
- Key words
- Finance; Project finance, capital markets, developers, senior secured notes, 144A
- Conference
- Geothermal Resources Council Transactions
- Year
- 2006
- Session
- Economics; capital markets; developers; senior secured notes
- Language
- English
Abstract
Recent experience shows that the capital markets are very receptive to the financing of geothermal projects. One example is the transaction which Ormat has successfully completed in December of 2005 - the financing of Orcal Geothermal Inc. (“Orcal”), by way of a senior secured notes offering under rule 144A of the US Securities Law, which allows the sale of bonds to a limited number of qualified investors without a full SEC registration. Orcal owns and operates three geothermal power projects, located in Imperial County in Southern California: Heber 1, Heber 2 and the Gould projects. This offering was a re-financing of a bank loan from November 2003, when Orcal acquired Heber 1 and Heber 2 geothermal projects from the then bankrupt Covanta Energy.
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