Medco-Ormat-Itochu Consortium Complete Execution of Agreements for Sarulla Geothermal Project

RENO, Nev., Dec. 18 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. announced today that the Medco-Ormat-Itochu Consortium (the "Consortium"), which consists of Medco Energi Internasional Tbk; Ormat International Inc., a subsidiary of Ormat Technologies, Inc. ("Ormat"); and the Itochu Corporation, completed the execution of the project documents for the 340 MW Sarulla Geothermal Project in Indonesia. The Consortium signed an Amendment to the Joint Operating Contract ("JOC") with PT Pertamina Geothermal Energy ("PGE"), a wholly owned subsidiary of the Indonesian state-owned oil and gas company PT Pertamina (Persero), and, together with PGE, signed the Amendment to the Energy Sales Contract ("ESC") with the state-owned Indonesian power company PT Perusahaan Listrik Negara ("PLN"). Prior to the above, the Consortium and PLN executed a Deed of Assignment ("DOA"), whereby PLN assigned and transferred to the Consortium the rights and obligations under the JOC and ESC.

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The Project, located in Tapanuli Utara, North Sumatra, represents the largest single-contract geothermal power project to date, and is a reflection of the large scale, high productivity and potential of Indonesian geothermal resources. The Project will be owned and operated by the Consortium members under the framework of the JOC with PGE, and is to be constructed in three phases, consisting of Ormat designed and supplied power generating units of 110 to 120 MW each, over the next five years. The first unit is scheduled to commence operation within 30 months of financial close, which is expected by the end of 2008. The remaining two units are scheduled to commence operation in stages within 18 months after the first unit's scheduled commissioning.

The total project cost is expected to be approximately $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. Ormat's equity participation shall initially be 25%, and may be reduced to not less than 12.75%.

Power delivered by the project will serve the base load of PLN's North Sumatra -- Aceh grid system and annual electricity sales revenue from the project is anticipated to be approximately $115 million when the full capacity is attained. The value of Ormat's scope of supply for the project is expected to be over $250 million.

Lucien Bronicki, Chairman and CTO of Ormat Technologies, stated, "The execution of the Sarulla project documents is an important landmark for Ormat, as we will be providing our technology to Indonesia for the first time. We congratulate the teams of PLN and Pertamina, as well as our Consortium partners Medco and Itochu, and express our appreciation for their efforts that have contributed to the Consortium achieving this milestone. Our commitment to the development of geothermal resources in Indonesia is strong and we are pleased to be sharing our long experience in constructing and operating geothermal plants. Ormat's air-cooled geothermal Combined Cycle technology, well proven over the last 15 years, is particularly suited to assure maximum utilization of the Sarulla resource in a sustainable manner."

Dita Bronicki, CEO of Ormat Technologies, added, "The signing today of the project documents is a significant milestone in the development of the Sarulla project. While the project is still subject to the uncertainty of the closing of financing, encouraged by the interest shown in financing this project by JBIC and other institutions, the Consortium shall make pre-development investments estimated at approximately $15 million before financial closing."

About Ormat Technologies

Ormat Technologies, Inc. is a vertically integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy- based power plants. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power generating equipment, and provides related services. Ormat products and systems are covered by more than 70 patents. Ormat currently operates the following geothermal and recovered energy-based power plants: in the United States -- Brady, Heber, Mammoth, Ormesa, Puna, Steamboat and OREG 1; in Guatemala -- Zunil and Amatitlan; in Kenya -- Olkaria; and in Nicaragua -- Momotombo.

Safe Harbor Statement

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2007 and the Prospectus Supplement filed with the Securities and Exchange Commission on October 23, 2007.

These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Ormat Technologies Contact: Investor Relations Contact: Dita Bronicki Todd Fromer / Marybeth Csaby CEO KCSA Worldwide +1-775-356-9029 212-896-1215/212-896-1236 dbronicki@ormat.com tfromer@kcsa.com/mcsaby@kcsa.com