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Indonesian, Japanese Companies Agree To Major Geothermal Project

August 27, 2007

JAKARTA, Indonesia, - At a total of over 300 megawatts power output, the Sarulla Geothermal Project located in Tapanuli Utara, North Sumatra will be the largest single-contract geothermal project to date in the geothermal industry. It's due to start putting out power in approximately 30 months. Indonesian business leaders call it a reflection of the large scale, high productivity and potential of Indonesian geothermal resources.
The Sarulla Geothermal project will be built over the next five years. It will consist of three phases of 110 to 120 MW each, with the first power generating unit scheduled to commence operation within 30 months of the financial closing, and the remainder scheduled to commence operation over a period of 18 months following the first unit. Power delivered by the project will serve the base load of PLN's North Sumatra - Aceh grid system.
The project will be owned and operated by the Consortium members under the framework of a JOC with the concession holder, PT Pertamina (Persero) (the state-owned oil and gas company) through its subsidiary PT Pertamina Geothermal Energy.
Medco is the leader of the Consortium, whose bid included completion of the development of the geothermal steam field, construction of the field piping systems and three Ormat designed and supplied power plants with a combined gross capacity of approximately 340 MW. The Consortium will own and operate the facilities, as well as sell electricity to PLN under a 30-year Energy Sales Contract ("ESC"). The total project cost is projected to be approximately US$800 million, and it is expected that the Japan Bank for International Corporation ("JBIC") will provide the majority of the project financing based on the Umbrella Note of Mutual Understanding signed between the Ministry of Finance of Indonesia and JBIC.
Mr. Akira Yokota, Executive Vice President of ITOCHU Corporation, said "ITOCHU has been actively pursuing environmental renewable energy projects in several countries and geothermal power projects are also an area we have been truly focusing. Indonesia has quite rich geothermal resources and we are very glad to have achieved this valuable step in contributing to the further prosperity of Indonesia through Sarulla Power Project using such environmentally friendly resources which Indonesia owns."

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