Israel’s Sunday Energy, Ormat team on $195M solar agreement

Reno, Nev.-based geothermal developer Ormat Technologies (NYSE:ORA) said today its Israeli subsidiary is collaborating with Israel-based Sunday Energy on $195 million of solar photovoltaic energy systems in Israel.

The new joint venture signifies Ormat's commercial entry into the solar energy market and its first major commitment to Israel’s solar PV market.

The agreement with subsidiary Ormat Systems includes building and operating solar PV systems with a total capacity of 36 megawatts. The projects are expected to primarily financed from non-recourse project finance debt.

Private Israeli solar PV developer Sunday is expected to contribute rights to its property and roofing needed to develop the solar energy systems, with the capacity to generate up to 1 MW. Global renewable energy project developer Ormat would own 70 percent of each system and also control it.

The companies plan to act as joint engineering, procurement and construction contractors of each project.

Electricity from the systems is to be sold to Israel Electric under 20-year power purchase agreements, which are expected to generate about $30 million in annual revenue. The state-owned utility is the sole supplier of electricity in the country.

In June, before entering into the joint venture, Ormat and Sunday inked a deal to install a solar systems with the capacity to generate up to 1 MW on the rooftop of an Ormat factory in Yavneh, Israel, which was also expected to sell electricity to Israel Electric (see Sunday Energy forges new ground in Israel with Ormat). The first system, with a capacity of 50 kilowatts, was installed and connected to the grid in August.

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