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| | Thu Jul 26, 2007
Secures Project Financing of US$100 Million with Morgan Stanley for Blue Mountain's Faulkner I Power Plant
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| | VANCOUVER, B.C. ( July 26, 2007 ) -- Nevada Geothermal Power Inc. (NGP) (TSX-V: NGP, OTC-BB: NGLPF) today announced that it has signed Commitment Letters and Term Sheets for a construction loan and permanent financing with Morgan Stanley ("Morgan Stanley").
Morgan Stanley will extend a loan facility of up to US$100 Million for the construction of the 35 MW Blue Mountain, Faulkner I project in Nevada. The closing of the Construction Loan is subject to certain conditions precedent and is expected to occur on or before December 31, 2007. The proceeds of the loan will be used to fund construction of the Faulkner I geothermal power plant, geothermal well field, related infrastructure and development costs.
Subject to customary condition precedent, at substantial completion of the project, Morgan Stanley will make an equity investment of approximately US$100 Million into a project level single purpose entity, holding the Blue Mountain Faulkner I assets. Proceeds from this investment will repay the construction loan. The transaction will employ a "flip structure", which will allocate substantially all distributable cash flow to NGP until its invested capital is returned. Once Morgan Stanley reaches a target after-tax yield on its investment in the project, NGP will receive substantially all of both distributable cash and taxable income. NGP also has the option to buy out the investors' remaining interest in the project at the then-current fair market value. NGP will be operating the power plant and geothermal field and receive compensation for such services.
Upon satisfaction of the conditions precedent to the loan, NGP shall pay a success fee to Markus K. Christen and to Dundee Securities Corporation. NGP retained Mr. Christen as its financial advisor in connection with arranging financing for development of the Blue Mountain Faulkner 1 Power Plant. Mr. Christen is a director of NGP and has considerable expertise and experience with structured financing related to renewable energy projects.
"We are very pleased to have secured the capital for the construction and operating phase for the Blue Mountain power project to provide renewable, clean energy to Nevada. We at NGP are proud to have earned the confidence of an institution like Morgan Stanley to support NGP's Blue Mountain project and are looking forward to an efficient and timely execution of this innovative financing and a continuous mutually beneficial relationship," said Brian Fairbank, President and Chief Executive Officer.
"We are excited to partner with NGP on this promising project", said Aaron Lubowitz, a Managing Director at Morgan Stanley.
Blue Mountain, located 30 kilometers (20 miles) west of the town of Winnemucca, Nevada, is ideally situated for development. The proposed Faulkner I geothermal plant will require a 20-mile long transmission line over relatively flat, undeveloped desert land to a connection point located on the utility's (Sierra Pacific) 120kV-transmission line north of Mill City, Nevada. Extensive environmental studies have been completed along the power line route and around the proposed power plant site and an environmental assessment is in process by the Bureau of Land Management (BLM).
The electric power is to be sold under a 20-year Power Purchase Agreement to the Nevada Power Company, for up to 35 of geothermal power. Phase 1 at Blue Mountain is expected to commence power generation in late 2009.
About Morgan Stanley: Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. Morgan Stanley's broad energy portfolio increasingly includes alternative and renewable energy financing to encourage energy efficient technologies.
The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 31 countries. For further information about Morgan Stanley, please visit www.morganstanley.com
About Nevada Geothermal Power Inc.:
Nevada Geothermal Power Inc. is a renewable energy company developing geothermal projects in the United States to provide electrical energy that is clean, efficient and sustainable. NGP is committed to the geothermal industry and currently owns a 100% leasehold interest in four properties: Blue Mountain, Pumpernickel, Black Warrior, all located in Nevada and Crump Geyser in Oregon. These properties are at different levels of exploration and development. NGP estimates a potential of approximately 150 MW to over 200 MW from the current leaseholds.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from registration is available.
This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect our current belief and are based upon currently available information. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition, or alteration to the information catered in this Press Release including such forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Nevada Geothermal Power Inc.
Brian D. Fairbank, P. Eng.
President & CEO
www.nevadageothermal.com
Investor Inquiries
Shelley Kirk
Nevada Geothermal Power Inc.
Telephone: 604-688-1553 X118
Toll Free: 866-688-0808 X118
Email: sfkirk@nevadageothermal.com
Tracy Weslosky or Fred Cowans
Managing Partners
Pro-Edge Consultants Inc.
Telephone: (416) 581-0177
Toll Free: (866) 544-9622 or
info@pro-edge.com
www.pro-edge.com |
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