Exhibit 99.1

North Brawley Power Plant

Asset Impairment Analysis

****

Prepared for

Ormat industries Ltd.

March 2011

Table of Contents

Chapter A — Introduction			3-11
Chapter B — Executive Summary			12-14
Chapter C — Description of the Company & Subject Assets			15-16
Chapter D — General economic outlook			17-19
Chapter E — Valuation			20-28
Chapter F — Exhibits			29

Chapter A — Introduction

1.1		General
		Giza Singer Even (“GSE”) has been mandated by Ormat Industries Ltd. (“Ormat” or the “Company”) to assist Ormat’s management with their asset impairment analysis in connection with the North Brawley power plant (“North Brawley” or the “Subject Assets”) to meet the requirements under IFRS accounting standards (“the Report”). In order to prepare the Report GSE and Ormat has retained the advisory services of Duff & Phelps, a world-class global independent financial advisory firm with a strong expertise and capabilities in the area of valuation services (D&P). This Report was prepared by GSE in cooperation with a D&P valuation team.
		The Report includes a description of the methodology and main assumptions and analyses used by the Company, D&P and GSE for assessing the value of North Brawley. Having said that, the description does not purport to provide a full and detailed breakdown of all the procedures that we applied in formulating the opinion.
1.2		Reliance on Information Received from the Company
		In formulating this Report, GSE and D&P assumed and relied on the accuracy, completeness, and up-to-datedness of the information received from the Company, including the financial data and any forward-looking information. GSE is not responsible for independently verifying the information it has received, and accordingly, did not conduct an independent examination of this information, other than general and superficial reasonability tests.
		In conducting this valuation, we also addressed, among other things, forecasts that were submitted to us by the Company. These projections are uncertain suppositions and expectations regarding the future, partly based on information existing in the Company as of the date of the valuation (“Valuation Date”), as well as various assumptions and expectations pertaining to the Company and to numerous extraneous

		factors, including the situation in the market segment in which the Company operates, potential competitors, and the general market situation. It should therefore be emphasized that there is no certainty that these suppositions and expectations will fully or partially materialize. The assessments and forecasts of the Company’s Management, apart from being based on these assumptions, relate to the Company’s future intentions and goals as of the valuation date. These intentions and goals are materially influenced by the situation in the Company and in the market and need to be continuously adjusted to the various changes in the working assumptions, the Company’s situation and the general economic situation. Any such change stands to influence the chance that these estimations will materialize. If the estimations of the Company’s Management do not materialize, the actual results may vary materially from the results projected or inferred from these estimations, insofar as they were used in this opinion, noting that the Fair Value was appraised in this Report, as set out in the accounting standard chapter.
1.3		Forward-looking Information
		In this report, we also addressed forward-looking information that was submitted to us by the Company’s management. Forward-looking information is uncertain information concerning the future, which is based on information available to the Company on the Valuation Date and includes management’s estimations or intentions as of the Valuation Date. If management’s projections do not materialize, the actual results may vary materially from the results estimated or implied from this information, insofar as they were used in this Report.
1.4		Limitations in the Application of the Report
		An economic assessment is not an exact science, and is intended to reflect in a reasonable and fair manner the situation at a given time, based on known data, basic assumptions and forecasts. Changes in key variables and/or other information may alter the basis for the basic assumptions and alter the conclusions accordingly.
		This Report does not constitute a due diligence study and does not purport to contain the information, investigations and tests or any other information

		contained in a due diligence study, including an examination of the Company’s contracts and engagements.
		We emphasize that this Report does not constitute legal advice or a legal opinion. The interpretation of various documents that we reviewed was done exclusively for the purpose of forming and providing this Report.
		The information appearing in the Report does not presume to include all the information required by a potential investor, and is not meant to determine the value for a specific investor. Different investors may have different objectives and methods of examination based on other assumptions, and accordingly, the price they would be willing to pay will vary.
1.5		Personal and Financial Relationship with the Company
		We hereby confirm that we have no personal interest in the company, other than the fact that we receive a fee for providing this Report, and our professional fees are not contingent on the results of this Report.
		It should be noted that last year, GSE prepared a report for the Company, in connection with a Purchase Price Allocation (PPA) analysis of the “Mammoth” complex, one of the Company’s geothermal assets.
		In connection with this Report, we should note that GSE will receive a letter of indemnity from the Company in the event that GSE is sued in a legal proceeding for the payment of any amount to the Company or to a third party for a cause of action that could stem, directly or indirectly, from this Report. In such case, the Company shall indemnify GSE for any expense that GSE shall incur or be required to pay for legal representation, legal advice, professional consulting, defense against legal proceedings, negotiations, etc. The Company shall also indemnify GSE for the amount that it shall be ordered to pay to a third party in a legal proceeding.
1.6		Reference to the Report

		We consent that this Report will be included in the 2010 annual report of Ormat Industries Ltd.
		This Report may not be used for any other purpose without receiving explicit prior and written permission from GSE. Anyone using the Report, in whole or in part, other than for the purposes for which it was submitted, and without the prior written approval of GSE, may be sued therefore.
1.7		Limitation of Liability
		This Report is intended for the use of the Company’s Management and for the purpose described above, and it may not be used for any other purpose, including transferring the Report to a third party or citing it, without our prior written consent. In no event, whether we have given our consent or not, will we assume any responsibility toward any third party which was forwarded the Report.
		In the course of our work, we received information, explanations, data and representations from the Company and/or from D&P and/or someone on the Company’s behalf (the “Information”). The responsibility for the information lies with whoever provided such information. The ambit of our work does not include an examination and/or verification of said Information. Consequently, our work shall not be considered and will not constitute a confirmation of the veracity, completeness or accuracy of the information provided to us. In no event will we be liable for any loss, damage, cost or expenditure that might be caused in any manner or form from acts of fraud, misrepresentation, deception, submission of information that is not true or complete or obstruction of information on the part of the Company and/or D&P and/or anyone on the Company’s behalf, or any other reliance on the Information, subject to the aforesaid.
		In general, forecasts tend to relate to future events and are based on reasonable assumptions made on the date of the forecast. Such assumptions may change over the forecasted period, and consequently forecasts made at the time of the valuation may differ from actual financial results and/or from estimates made at a later date. Therefore, these forecasts may not be treated with the same level of confidence attributed

		to data appearing in audited financial statements. We offer no opinion regarding the correctness of the forecasts made by the Company, D&P and/or by anyone on their behalf with the financial results that will actually be obtained.
		The Report does not constitute a due diligence study and should not be relied on as such.
		Moreover, financial assessments do not presume to be an exact science, and their conclusions are often contingent on the subjective judgment exercised by the valuator. Although we believe that the value that we have set is reasonable based on the information submitted to us, another value appraiser may reach a different value.
1.8		Sources of Information
		In the course of the Report, we relied upon financial and other information, including prospective financial information, obtained from the Company, D&P and from various public, financial, and industry sources. Our conclusion is dependent on such information being complete and accurate in all material respects. We will not accept responsibility for the accuracy and completeness of such provided information.
		The principal sources of information used in performing our valuation include:

•

Discussions with the Company’s management and D&P as follows:

	•		Mrs. Dita Bronicki, CEO, Ormat Industries Ltd. and Ormat Technologies, Inc
	•		Yoram Bronicki, President and COO, Ormat Technologies Inc.
	•		Mr. Joseph Tenne, CFO, Ormat Industries Ltd. and Ormat Technologies Inc.
	•		Mr. Eyal Hen, Controller, U.S. Operations, Ormat Technologies Inc.
	•		Mr. Nir Yehuda, Controller, Ormat Industries Ltd.
	•		Mr. Joseph Omoworare, Valuation Services Director, Duff & Phelps

	•		Historical cost and financial statement information provided by Ormat Technologies Inc and Ormat Industries Ltd.
	•		Ormat Technologies Inc. Management’s financial projections for North Brawley
	•		North Brawley Plant Status Memo as of 4/2/11
	•		Treasury Grant Application as of the Valuation Date
	•		Tax Basis Memo as of the Valuation Date
	•		Power Purchase Agreements (“PPAs”) related to North Brawley
	•		Federal Reserve Statistical Release. H.15 (519) Selected Interest Rates
	•		Bloomberg historical rates for corporate bonds as of the valuation Date
	•		Other publicly available information from sources, but not limited to, Capital IQ, and SNL, deemed relevant to preparation of this Report
	•		Financial models and analysis received from D&P

1.9		The Accounting Standard
		At the request of the Company, the valuation will be used for implementing International Accounting Standard No. 36 regarding asset impairment (hereinafter: the “Standard” or “IAS 36”) in its financial statements.
		The purpose of the Standard is to prescribe the procedures that an enterprise must apply to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount when the carrying value of the asset exceeds the amount to be recovered through use or sale of the asset. In this case, the asset value has been impaired, and the Standard requires the corporation to recognize an impairment loss. The Standard also specifies when a corporation should reverse an impairment loss and requires certain disclosures for impaired assets, and for investments in investee companies that are not subsidiaries, which are carried in the financial

		statements in an amount that significantly exceeds their market value or net sale price.
		The Standard prescribes the accounting treatment and statement required in the event of asset impairment. If an enterprise prepares consolidated financial statements (including proportionate consolidation), the Standard will be applied to the accounting treatment of the impairment of all the assets appearing in the enterprise’s consolidated balance sheet, including investments in investee companies that are not subsidiaries, goodwill stemming from the acquisition of subsidiaries and fair value adjustments. In effect, this Standard applies to investments in subsidiaries and jointly controlled companies, so that provisions for impairment loss, which are recognized in the consolidated financial statements with respect to assets of the subsidiary or the jointly-controlled company, including goodwill and fair value adjustments, will be stated in the separate financial statements of the parent company as a reduction of the investment account in the subsidiary or jointly-controlled company.
		The Standard prescribes that the recoverable amount of an asset should be estimated whenever there are indications that an asset may be impaired.
		The Standard requires recognizing the impairment loss of an asset (i.e. the value of the asset has declined) whenever the carrying amount of the asset exceeds its recoverable amount. An impairment loss will be recognized in the statement of profit and loss for those assets stated at cost and should be treated as a revaluation decrease, and only for those assets carried at a revalued amount in accordance with other accounting standards or in accordance with the provisions of any law.
		The Standard prescribes that a recoverable amount shall be calculated as the Fair Value less costs to sell or Value in Use, whichever is higher:

1.

The Value in Use of the asset is the estimate of the present value of future cash flows to be derived from use and disposal of the asset at the end of its useful life

2.

Fair value less costs to sell is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal

		The Standard states that the best evidence of an asset’s Fair Value less costs to sell is a price in a binding sale agreement in an arm’s length transaction, adjusted for incremental costs that would be directly attributable to the disposal of the asset.
		If there is no binding sale agreement but an asset is traded in an active market, Fair Value less costs to sell is the asset’s market price less the costs of disposal. The appropriate market price is usually the current bid price. When current bid prices are unavailable, the price of the most recent transaction may provide a basis from which to estimate Fair Value less costs to sell, provided that there has not been a significant change in economic circumstances between the transaction date and the date as at which the estimate is made.
		If there is no binding sale agreement or active market for an asset, Fair Value less costs to sell is based on the best information available to reflect the amount that an entity could obtain, at the balance sheet date, from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. In determining this amount, an entity considers the outcome of recent transactions for similar assets within the same industry. Fair Value less costs to sell does not reflect a forced sale, unless management is compelled to sell immediately.

1.10		Details on the Valuating Company
		GSE is the leading non-affiliated economic and financial advisory firm in Israel. The firm has been in business for over 25 years. GSE advisory services are divided into four fields: Consulting to corporations and government authorities; mergers and acquisitions; issues; tenders and infrastructure products.

		GSE provides its services through several departments: value economics, financing and capital market, applied economic research, financial accounting and risk management, project and infrastructure finance, and a professional department. The partners heading the firm: Chairman of the firm Yechiel Even and CEO Yariv Philosoph, together with Prof. Eli Kraisberg, Yuval Zilberstein, Eli Goldberg, Avshalom Herscovici and Udi Rosenberg, who also heads the firm’s professional department. Other partners of the firm are Eyal Jedwab, Yuval Lapidot, Yuval Barak and Hila Himi from the Corporate Finance Department, Asher Shakler from the Financial Accounting and Risk Management Department, Varda Stern from the Project Finance and National Infrastructures Department, and Alex Shechter from the Economic Valuation Department.
		In order to prepare this Report GSE and Ormat has retained the advisory services of D&P, a world-class global independent financial advisory firm with a strong expertise and capabilities in the area of valuation services. This Report was prepared by GSE in cooperation with a D&P valuation team.
		The GSE team was headed by Yechiel Even. Mr. Even has over twenty years of experience in performing valuations. He holds a B.A. and M.B.A. in Economics and Business Administration from Bar-Ilan University.

Chapter B — Executive Summary

1.

Description of the Company and Subject Assets

	•		Ormat is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. With more than four decades of experience in geothermal and recovered-energy generation, Ormat products and systems are covered by 80 U.S. patents.
	•		The North Brawley Geothermal Power Plant project is located in Brawley, California. The power plant was placed in service on January 15, 2010 and consists of five (5) water cooled Ormat Energy Converter (OEC)*, water system and other auxiliary systems to produce 50 MW of electricity. Since early 2009, however, Brawley has been hampered by certain factors (see Chapter C) that have limited its generation capabilities. In the course of 2010, Brawley has been producing, on average, approximately 30 MW of electricity.

2.		Description of the Valuation Methodology
		To estimate the Fair Value of North Brawley a DCF analysis was utilized. Since the exact generation of the facility could not be calculated due to recent construction and addition of new wells (see chapter C) we used high probability and low probability generation assumptions to estimate the Fair Value based on the expected cash flow approach. The Fair Value of North Brawley was therefore estimated by:

	•		Determining operational characteristics of the assets under three scenarios; a 40MW, a 45MW and a 50MW scenario, as well as forecasting financial performance under each such scenario
	•		Performing a DCF analysis for each scenario. The DCF for each case was then assigned a probability and an estimation of Fair Value was calculated by summing the total weighted expected value of all cases

3.

Valuation Assumptions

	•		For the purpose of preparing this Report Ormat Technologies Inc’s management provided historical and forecasted performance characteristics for North Brawley, including generation output, additional capital expenditure requirements to improve output, energy revenues, along with plant and operating expenses. After conducting multiple interviews with management as well as performing various reasonability checks, we have adopted management forecasts and assumptions regarding the projected operations of the Brawley facility (see Chapter E for further detail)
	•		The weighted average cost of capital was calculated by weighting the required returns on fixed income and common equity capital in proportion to their estimated percentages in an expected capital structure. The valuation model assumes a weighted average cost of capital (WACC) of 8%

4.

Valuation Conclusion 4.1 Fair Value Based on probabilities provided by the Company’s Management, the Fair Value of North Brawley is estimated at $140.4 million (pre disposal costs), as exemplified below:

4.1

Fair Value Based on probabilities provided by the Company’s Management, the Fair Value of North Brawley is estimated at $140.4 million (pre disposal costs), as exemplified below:

Case		Value ($K)				Probability				Relative Value ($K)
40 MW			116,283				20	%			23,257
45 MW			142,467				40	%			56,987
50 MW			150,425				40	%			60,170
Total							100	%			140,414

4.2

Disposal Costs Based on discussions with the management we assumed disposal costs estimated at 1% of the Fair Value, totaling $1.4 million

4.3		Conclusion
		We estimate that the Fair Value of North Brawley, less costs to sell, is $139 million
4.4		Sensitivity Analysis
		We have performed a sensitivity analysis for the value of North Brawley, less costs to sell, with respect to the weighted average cost of capital as follows:

WACC			7.00	%			7.50	%			8.00	%			8.50	%			9.00	%
Fair Value (less costs to sell)			156,062				147,678				139,009				130,642				122,545

Chapter C — Description of the Company and Subject Assets

Ormat Technologies, Inc.

Ormat is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. With more than four decades of experience in geothermal and recovered-energy generation, Ormat products and systems are covered by 80 U.S. patents. Ormat has engineered and built power plants totaling approximately 1,300 MW of gross capacity. Ormat’s current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States — Brady complex, Brawley, Heber complex, Jersey Valley, Mammoth complex, Ormesa complex, Puna, Steamboat complex, OREG 1, OREG 2, OREG 3 and OREG 4; in Guatemala - Zunil and Amatitlan ; in Kenya — Olkaria III; and, in Nicaragua — Momotombo.

Description of Subject Assets¹

The North Brawley Geothermal Power Plant project (hereinafter: “The plant” is located in Brawley, California. The plant was placed in service on January 15, 2010 and consists of five (5) water cooled Ormat Energy Converter (OEC)*, water system and other auxiliary systems to produce 50 MW of electricity. The Plant is an addition to the expanding network of geothermal Type Power Plants in the area, which make use of the high temperature fluid beneath the surface to produce steam or brine and induce rotation in a turbine / generator configuration. Since early 2009, Brawley has been hampered by five major factors:

	•		Reduced production from the Geothermal field due to injection restrictions that were caused by solids accumulation in the injection wells and in the near-well bore reservoir
	•		The mitigation of the solids production resulted in high operating costs in filtration of the injection flow and cleanouts of the injection wells
	•		High well field operating costs due to short run life of the production pumps
	•		Additional capital expenditure investment in pursuit of solutions to the injection and the production issues, including filtration and separation systems, drilling or modifying the injection wells drilling production wells, adding injection pumps and constructing pipelines for the new wells; and
	•		Once more injection capacity was secured, the plant has been affected by a lack of production fluids due to the conversion of some production wells into injection wells

Chapter D — General economic outlook

		Introduction2
		In performing our analysis, we considered the general economic outlook as of the Valuation Date and its potential impact on the Subject Assets. An assessment of the general economy can often identify underlying causes for fluctuations in the financial and operating performance of a company. This overview of the general economic outlook is based on our examination of various economic analyses and the consensus forecasts of Blue Chip Economic Indicators and Blue Chip Financial Forecasts (collectively, the “consensus”).
		Economic Growth
		The United States’ real gross domestic product (“GDP”) (i.e., output adjusted for the impact of inflation) decreased 6.4% during the first quarter of 2009, and 0.7% in the second quarter. These declines were primarily attributable to sharp decreases in residential and non-residential fixed investments, business inventories, and, to a lesser extent, real personal consumption expenditures (“PCE”). The decline in inventories over the first half of 2009 was the largest on record.
		In contrast, real GDP grew by 2.2% in the third quarter of 2009, and by 5.6% in the fourth quarter, the latter being the highest level observed in over six years. This recovery was primarily attributable to the highest increase in real PCE since the first quarter of 2007, a rise in residential investment, continued federal spending, and a significant reduction in the rate of business inventory liquidation.
		Despite its recovery in the third and fourth quarters, real PCE still declined by an overall 0.6% in 2009. This followed a decline of 0.2% in 2008, thereby representing the first uninterrupted two-year contraction since 1932-1933. Industrial production also continued the third-quarter recovery trend into the

		representing the first uninterrupted two-year contraction since 1932-1933. Industrial production also continued the third-quarter recovery trend into the final quarter of 2009, but still declined by an overall 9.8% during 2009. While the recession was declared over in September 2009, it was of greater duration than the recessions of 1974-1975 and 1981-1982. The Bureau of Economic Analysis estimates that real GDP contracted by 2.4% in 2009 on a year-over-year basis, the biggest decline since 1946.
		For the first quarter of 2010, real GDP grew by 2.7% due to gains in real PCE and industrial production. Real PCE increased by 3.0% during the quarter because of an increase in purchases of consumer durables, purchases of nondurables, and services. During the first quarter, industrial production increased by 6.9%, continuing the pattern of strong quarterly growth that has now reached three consecutive quarters. The growth in industrial demand is explained by efforts to rebuild business inventories, signs of recovery in consumer and business demand, and growth in exports.
		For the second quarter of 2010, the consensus estimates that real GDP grew by 3.2%, which is lower than originally estimated due to downward revisions on growth contributions by real PCE, residential investment, and net exports. Real PCE is expected to have grown by 2.8% during the quarter, while industrial production is estimated to have risen by 6.3%.
		Economic growth is expected to continue into the second half of the year, although some economists are starting to fear the possibility of a double dip recession. The consensus predicts growth to continue in real PCE and business investment, but government spending will decrease during the second half of 2010, as the contribution from the fiscal stimulus continues to erode. Growth in industrial production is also expected to moderate, as business inventories have been replenished and are more in line with market demand. To put it into perspective, rebuilding of inventories contributed to approximately 57% of real GDP growth over the latter half of 2009 and first quarter of 2010.

Overall, the consensus has a positive outlook for 2010, with an estimated real GDP growth of 3.1%. The expected recovery still falls short of the rebound observed in other post-World War II recessions. For instance, real GDP growth in the year following the recessions of 1957-58, 1973-75, and 1981-82 was on average 5.6%. The consensus believes that real PCE will grow at a healthy 2.4% during 2010. However, additional gains in the remainder of 2010 and during 2011 are being constrained by slowly recovering labor markets, household deleveraging, tight credit markets, softness in home values and, more recently, weak equity prices. On a positive note, the consensus estimates industrial production to expand by 5.4% in 2010. Regarding 2011, the consensus estimates real GDP growth of 3.0%, assisted by projected increases in real PCE and industrial production of 2.6% and 4.7%, respectively. A long-term (ten-year) average real GDP growth rate of 2.8% was projected in a recent survey published by the Federal Reserve Bank of Philadelphia (the “Philadelphia Fed”).3

Chapter E — Valuation

1.

Valuation methodology

	1.1		General
			In our estimation of Fair Value we consider the income approach. The income approach is a valuation technique that provides an estimation of the Fair Value of an asset based on market participant expectations about the cash flows that an asset would generate over its remaining useful life. The Income Approach begins with an estimation of the annual cash flows a market participant would expect the subject asset (or business) to generate over a discrete projection period. The estimated cash flows for each of the years in the discrete projection period are then converted to their present value equivalent using a rate of return appropriate for the risk of achieving the projected cash flows. The present value of the estimated cash flows are then added to the present value equivalent of the residual value of the asset (if any) or the business at the end of the discrete projection period to arrive at an estimate of Fair Value.
			In some situations, the expected cash flow approach is a more effective measurement tool than the traditional approach. In developing a measurement, the expected cash flow approach uses all expectations about possible cash flows, taking into consideration assumed probabilities of future events and/or future scenarios, instead of the single cash flow scenario. We used this approach in our valuation.
	1.2		Application of the Income Approach in this analysis
			To estimate the Fair Value of North Brawley under IAS 36, a DCF analysis was utilized. Under IFRS — IAS 36, an asset is considered to be impaired if the carrying value of the asset is greater than its estimated Fair Value. The impairment is recorded in the amount by which the carrying value exceeds the Fair Value of the asset. Since the exact generation of the facility could not be calculated due to recent construction and addition of new wells, as mentioned in the Subject Asset description (see chapter C), we used high probability and low probability generation assumptions to estimate the Fair Value (the expected cash flow approach).

The Fair Value of the assets of North Brawley as of the Valuation Date was estimated by:

	•		Determining operational characteristics of the assets under 3 scenarios; a 40MW, a 45MW, and a 50MW scenario
	•		Forecasting revenues and variable operating costs as applicable, including energy prices for the electric output for each case;
	•		Forecasting fixed expenses and capital expenditures as applicable for each case
	•		Performing a DCF analysis for each case. The DCF for each case was then assigned a probability and an estimation of Fair Value was calculated by summing the total weighted expected value of all cases.

2.     North Brawley Valuation

	2.1		General
			For the purpose of preparing this Report, Ormat’s management provided D&P and GSE with historical and forecasted performance characteristics for North Brawley, including generation output, additional capital expenditure requirements to improve output, energy revenues, along with plant and operating expenses. D&P and GSE have adopted management forecasts and assumptions. To check the reasonability of said forecasts and assumptions, GSE and D&P have conducted several interviews and conversations with the management and have reviewed various relevant materials provided by the Company (as stated in Chapter A). Also, the Company and GSE have retained the advisory services of D&P, a world-class global independent financial advisory firm with a strong expertise and capabilities in the area of valuation services.
			D&P compared the forecasted operating results of the facility to the historical operating characteristics of the facility as well as to the operating characteristics for other geothermal facilities that D&P are familiar with. D&P also reviewed the technical and operational discussions provided in the North Brawley Plant Status Memo prepared by management and the Testing Report prepared by JFMPE, Inc and has discussed the operating characteristics of the facility with the management. Based on these reviews and conversations, and given the limited historical performance of the facility, D&P based their review around the

reasonableness of management’s ability to add additional injection and/or production wells and improve the functionality of the production pumps through additional Capital expenditure and has concluded that management’s forecasts were reasonable. D&P has also compared certain management’s forecasts to those made by third-party sources (as will specified below) and concluded that the estimate was reasonable

2.2

Key assumptions

2.2.1

Operating Characteristics

As of the Valuation Date the facility is producing, on average, approximately 30MW of electricity. However, management believes that the North Brawley resource can support 50 MW of electricity and expects that, with additional capital expenditures (including drilling of additional wells), the facility can produce between 45MW and 50MW of electricity. Therefore management has assigned an equal probability of 40 percent to both cases. A more conservative case where the facility only reaches 40MW of electricity was also considered by management and was assigned a 20 percent probability.

2.2.2

Production and Revenues

North Brawley is currently under a 20-year Power Purchase Agreement (“PPA”) to sell its electrical output to Southern California Edison. Through year 2030, the revenue projected by Management is based on the PPA price and certain time of day adjustments. Additionally, under the 40MW and 45MW cases, the contracted revenue was adjusted for certain penalties per the PPA terms4.

After 2030, projected revenue is based on Management’s estimate of a market energy price of $120 / MWh and grown at an inflationary rate of 1.5% throughout the remaining useful life of the facility. To verify the reasonability of the market energy price assumptions, D&P compared Management’s projected energy price to those made by third-party sources (e.g. Wood Mackenzie) and concluded that the estimate was reasonable.

2.2.3

Operating Costs

The Company provided D&P and GSE with forecasted fixed and variable operating expenses, including costs such as plant operating expenses, utilities,

insurance, tax, royalties, and administrative expenses through year 2040 for the Subject Assets. Management also provided additional variable O&M forecasts in light of expanding of the generation capability and transitional operating costs of North Brawley. The assumptions with regard to the additional O&M costs due to expansion of the wells and to facilitate the functionality of the equipment were deemed reasonable based on our discussions with Management and review of the Plant Status Memo.

2.2.4

Capital Expenditures

		Management also provided detailed reports in regards to the nature of additional capital expenditures required to improve the operations of North Brawley. For the purpose of this analysis, maintenance expenditures were fully capitalized, and included additional near term maintenance costs for the improvement of North Brawley based on a review of independent engineering reports of North Brawley. At the end of the life of the Facility, the expected salvage and scrap value is assumed to net completely against any potential removal or site cleanup costs.
		To test the reasonableness of these assumptions, D&P reviewed the historical Capital expenditure and fixed operating costs of North Brawley. D&P also compared the forecasted amounts to capital expenditures forecasts they have reviewed for other similar geothermal facilities and those made in the independent engineering reports.

2.2.5

Depreciation

Depreciation expense was calculated based on a 5-year MACRS schedule relevant for the Subject Asset. In accordance with applicable tax rules and regulation, the plant’s balance basis used to calculate the 5-year MACRS depreciation schedule was the Fair Value of the asset. Remaining depreciation amount was based on an annual rate of 4.55% of the fair value (in accordance with US tax regulations)

2.2.6

Tax

We utilized the corporate tax rate that a market participant that will operate the assets at their highest and best use would be expected to incur, and which is not necessarily the tax rate that is incurred by Ormat or North Brawley. We also

adjusted for California state income taxes incurred by the Subject Assets. The tax rate that we therefore used in our analysis was 40.7%.

2.2.7

Working Capital

We assumed 30 receivable days and 30 payable days to calculate the change in working capital.

3.

Weighted Average Cost Of Capital (WACC)

		The cost of capital reflects, among others, the business-operating risk of the company’s operations. The risk is partly the market risk and partly the risk derived from the company’s activities.
		The weighted average cost of capital was calculated by weighting the required returns on fixed income and common equity capital in proportion to their estimated percentages in an expected capital structure.
		The valuation model assumes a weighted average cost of capital (WACC) of 8%.

		Return on Equity (Re)
		The following table includes the main parameters applied in assessing the proper return on equity of the company (using CAPM model):

Parameter		Value				Comment
Risk Free Rate			4.18	%			1
Specific Risk Premium			0.0	%
Equity Risk Premium			5.50	%			2
Beta			1.2				3
Return on Equity			10.8	%

Company		Beta levered				D/V				Beta unleveraged
Calpine Corp.			1.15				65.1	%			0.55
Magma Energy Corp.			0.84				48	%			0.54
Ram Power, Corp.			0.77				16.7	%			0.67
US Geothermal Inc.			1.79				12.9	%			1.64
Nevada Geothermal Power Inc.			1.05				68.7	%			0.46
NRG Energy, Inc.			1.18				68.5	%			0.52
Ormat Technologies Inc.			1.23				34.9	%			0.93
Average			1.19				45	%			0.76

The betas reported were adjusted to unlevered betas. This process is accomplished by deleveraging the reported betas so that the effect of financial risk is removed, leaving betas reflective of only business risk.

		We unlevered each guideline company’s levered beta according to the following standard formula:

The unlevered betas are then re-levered to reflect the target capital structure, as follows:

Unlevered Beta			0.76
Industry Debt-to-Equity Ratio			100	%
Effective Income Tax Rate			40.7	%
Re-levered Beta			1.21

		Capital structure (D/V)
		The capital structure deemed appropriate for the Subject Assets was based on target capital structures used by market participants to finance geothermal projects as of the Valuation Date. Specifically, a capital structure of 50 percent common equity, 37.5 percent debt, and 12.5 percent tax equity (further explained below) has been reflected in the Report. Since the characteristics and risk profile for the tax equity and debt financings were similar, they have been combined into one fixed income portion to yield a capital structure for the Subject Assets of 50 percent fixed income and 50 percent equity.
		Tax Equity
		Due to regulations involving tax depreciation and amortization as well as the availability of production tax credits, cash grants etc, much of the value of a geothermal generating facility can be attributed to its derived tax benefits. An appropriate discount rate for these benefits should reflect their unique risk and characteristics. As the WACC calculated based on the guideline companies did not reflect the unique aspects and the risk profile related to the tax benefits, we incorporated an appropriate discount rate for these assets as well. Specifically, Management provided us with a typical tax equity partner rate of return assumption of a 9% — 10% range. We have therefore assumed a cost of tax equity of 10% which reasonably reflects the risk profile of the tax benefits.
		Cost of Debt (Rd)
		Since the interest on debt capital is deductible for income tax purposes, we used the after-tax interest rate in our calculation. In order to estimate the cost of debt capital we utilized debt ratings as provided by Capital IQ, Standard & Poor’s (“S&P”) Ratings Direct, and bond yield information provided by Bloomberg Finance. Debt ratings for each of the guideline companies were obtained from review of information available from the aforementioned sources. As a result, and

		considering the specific risk profile of the Plant, we used a 20-year Industrial BBB+ rate, as published by Bloomberg, for our cost of debt.
		WACC Calculation Summary
		Based on the data above the cost of capital calculation resulted in WACC of 8%
		The following table describes the WACC calculation:

Parameter		Value
Risk free Interest Rate			4.18	%
Beta			1.21
Market Premium			5.50	%
Return on Equity			10.8	%
Fixed Income (tax equity and debt)			5.1	%
Tax Rate			40.70	%
Equity			50	%
Fixed Income (tax equity and debt)			50	%
WACC			8	%

4		Valuation Conclusion
4.1		Fair Value
		The full DCF analysis used to calculate Fair Value of North Brawley (in the three scenarios) is shown in the exhibits (Chapter F).
		Based on the Income Approach and based on probabilities provided by the Company’s Management, the Fair Value of North Brawley, as of the Valuation Date, is estimated at $155.4 million (pre disposal costs), as exemplified below:

Scenario		Value ($K)				Probability				Expected Value ($K)
40 MW			116,283				20	%			23,257
45 MW			142,467				40	%			56,987
50 MW			150,425				40	%			60,170
Total							100	%			140,414

4.2		Disposal Costs
		Based on discussions with the Company’s Management we assumed disposal costs estimated at 1% of the Fair Value, totaling $1.4 million

4.3		Conclusion
		We estimate that the Fair Value of North Brawley, less costs to sell, is $139 million
4.4		Sensitivity Analysis
		We have performed a sensitivity analysis for the value of North Brawley, less costs to sell, with respect to the weighted average cost of capital as follows:

WACC			7.00	%			7.50	%			8.00	%			8.50	%			9.00	%
Fair Value (less costs to sell)			156,062				147,678				139,009				130,642				122,545

Chapter F — Exhibits

1. Discounted Cash Flow Analysis — 40 MW Scenario

North Brawley

Depreciation Life		5-Year MACRS
Remaining Life			30
Existing Discount Rate			8.00	%
Tax Rate			40.75	%
Net Capacity (MW)		40 MW

						2011				2012				2013				2014				2015				2016				2017				2018				2019				2020				2021				2022				2023				2024				2025
Total Revenue							27,989				27,849				27,710				27,572				27,434				27,297				27,160				27,024				26,889				26,755				26,621				26,488				26,355				26,224				26,093
Less PPA penalties							(202	)			(210	)			(219	)			(227	)			(235	)			(243	)			(251	)			(259	)			(268	)			(276	)			(284	)			(291	)			(299	)			(307	)			(315	)
Adjusted Revenue							27,788				27,639				27,492				27,345				27,199				27,053				26,909				26,765				26,622				26,479				26,338				26,196				26,056				25,916				25,778
O&M							19,363				8,451				8,557				8,663				8,770				8,876				8,982				9,206				9,436				9,672				9,914				10,162				10,416				10,676				10,943
Insurance							609				609				584				583				598				565				579				577				575				573				571				569				567				565				563
Property Tax							1,382				1,341				1,300				1,261				1,223				1,187				1,151				1,117				1,083				1,051				1,019				989				959				930				902
Royalties							1,120				1,114				1,108				1,103				1,097				1,092				1,086				1,081				1,076				1,070				1,065				1,060				1,054				1,049				1,044
G&A							870				822				843				864				885				908				930				954				977				1,002				1,027				1,053				1,079				1,106				1,133
Utilities, Environmental, Others							3,362				2,488				2,550				2,614				2,679				2,746				2,815				2,885				2,957				3,031				3,107				3,185				3,264				3,346				3,430
Total Operating Costs							26,706				14,825				14,943				15,088				15,253				15,373				15,543				15,820				16,105				16,399				16,703				17,017				17,340				17,673				18,016
Operating Costs ($/kW-year)							667.64				372.48				377.34				382.92				389.05				394.09				400.45				409.61				419.10				428.91				439.05				449.53				460.37				471.57				483.14
EBITDA							1,082				12,815				12,549				12,257				11,946				11,680				11,366				10,945				10,517				10,080				9,634				9,180				8,716				8,244				7,762
Depreciation							29,676				44,506				29,225				20,067				20,200				13,915				7,335				6,978				6,775				6,803				6,660				6,517				6,548				6,579				6,611
EBIT							(28,594	)			(31,692	)			(16,677	)			(7,810	)			(8,255	)			(2,235	)			4,031				3,968				3,742				3,276				2,974				2,663				2,169				1,665				1,151
Income Tax			40.7	%			(11,651	)			(12,913	)			(6,795	)			(3,182	)			(3,364	)			(910	)			1,642				1,617				1,525				1,335				1,212				1,085				884				678				469
After-tax Operating Profit							(16,943	)			(18,778	)			(9,882	)			(4,628	)			(4,891	)			(1,324	)			2,388				2,351				2,217				1,941				1,762				1,578				1,285				986				682
Plus: (Increase)/Decrease in Working Capital							(90	)			(978	)			22				24				26				22				26				35				36				36				37				38				39				39				40
Less: CAPEX							(5,620	)			(1,000	)			(1,025	)			(1,051	)			(1,077	)			(4,104	)			(1,131	)			(1,160	)			(1,189	)			(1,218	)			(1,249	)			(1,280	)			(1,312	)			(1,345	)			(1,379	)
Plus: Depreciation Benefit							29,676				44,506				29,225				20,067				20,200				13,915				7,335				6,978				6,775				6,803				6,660				6,517				6,548				6,579				6,611
Free Cash Flow from Operations							7,023				23,750				18,341				14,413				14,258				8,509				8,618				8,204				7,839				7,563				7,211				6,853				6,559				6,260				5,955
PV Periods							6.0				18.0				30.0				42.0				54.0				66.0				78.0				90.0				102.0				114.0				126.0				138.0				150.0				162.0				174.0
Discount Rate							8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%
PV Factor							0.9623				0.8910				0.8250				0.7639				0.7073				0.6549				0.6064				0.5615				0.5199				0.4814				0.4457				0.4127				0.3821				0.3538				0.3276
PV of Free Cash Flow from Operations							6,758				21,160				15,131				11,009				10,085				5,572				5,226				4,606				4,075				3,640				3,214				2,828				2,506				2,215				1,951
Sum of PV of Free Cash Flow from Operations			116,283

North Brawley

Depreciation Life		5-Year MACRS
Remaining Life			30
Existing Discount Rate			8.00	%
Tax Rate			40.75	%
Net Capacity (MW)		40 MW

						2026				2027				2028				2029				2030				2031				2032				2033				2034				2035				2036				2037				2038				2039				2040
Total Revenue							25,962				25,832				25,703				25,575				24,887				30,765				30,905				31,046				31,190				31,336				31,484				31,634				31,786				31,941				32,100
Less PPA penalties							(323	)			(331	)			(338	)			(346	)			—				—				—				—				—				—				—				—				—				—				—
Adjusted Revenue							25,639				25,502				25,365				25,229				24,887				30,765				30,905				31,046				31,190				31,336				31,484				31,634				31,786				31,941				32,100
O&M							11,217				11,497				11,785				12,079				12,381				12,691				13,008				13,333				13,667				14,008				14,359				14,718				15,085				15,463				15,849
Insurance							561				559				557				555				549				593				593				593				593				593				593				593				592				592				592
Property Tax							875				849				823				799				775				752				729				707				686				665				645				626				607				589				571
Royalties							1,038				1,033				1,028				1,023				995				1,231				1,236				1,242				1,248				1,253				1,259				1,265				1,271				1,278				1,284
G&A							1,162				1,191				1,221				1,251				1,282				1,314				1,347				1,381				1,416				1,451				1,487				1,524				1,562				1,602				1,642
Utilities, Environmental, Others							3,515				3,603				3,693				3,786				3,880				3,977				4,077				4,179				4,283				4,390				4,500				4,613				4,728				4,846				4,967
Total Operating Costs							18,369				18,733				19,108				19,493				19,863				20,558				20,991				21,435				21,892				22,361				22,843				23,339				23,847				24,369				24,905
Operating Costs ($/kW-year)							495.09				507.43				520.18				533.34				546.19				568.15				583.02				598.36				614.18				630.50				647.33				664.68				682.58				701.03				720.05
EBITDA							7,270				6,769				6,257				5,736				5,024				10,207				9,914				9,611				9,298				8,975				8,641				8,296				7,939				7,572				7,194
Depreciation							6,644				6,678				6,713				6,748				6,785				6,822				6,860				6,899				6,940				6,981				7,023				7,066				7,111				7,156				10,707
EBIT							626				91				(455	)			(1,013	)			(1,760	)			3,385				3,054				2,712				2,359				1,994				1,618				1,229				829				415				(3,512	)
Income Tax			40.7	%			255				37				(186	)			(413	)			(717	)			1,379				1,244				1,105				961				812				659				501				338				169				(1,431	)
After-tax Operating Profit							371				54				(270	)			(600	)			(1,043	)			2,006				1,809				1,607				1,398				1,182				959				728				491				246				(2,081	)
Plus: (Increase)/Decrease in Working Capital							41				42				43				43				59				(432	)			24				25				26				27				28				29				30				31				631
Less: CAPEX							(1,413	)			(1,448	)			(1,485	)			(1,522	)			(1,560	)			(1,599	)			(1,639	)			(1,680	)			(1,722	)			(1,765	)			(1,809	)			(1,854	)			(1,900	)			(1,948	)			(1,996	)
Plus: Depreciation Benefit							6,644				6,678				6,713				6,748				6,785				6,822				6,860				6,899				6,940				6,981				7,023				7,066				7,111				7,156				10,707
Free Cash Flow from Operations							5,643				5,325				5,001				4,670				4,241				6,797				7,055				6,852				6,642				6,425				6,201				5,969				5,731				5,485				7,260
PV Periods							186.0				198.0				210.0				222.0				234.0				246.0				258.0				270.0				282.0				294.0				306.0				318.0				330.0				342.0				354.0
Discount Rate							8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%
PV Factor							0.3033				0.2809				0.2601				0.2408				0.2230				0.2064				0.1912				0.1770				0.1639				0.1517				0.1405				0.1301				0.1205				0.1115				0.1033
PV of Free Cash Flow from Operations							1,712				1,496				1,301				1,125				946				1,403				1,349				1,213				1,088				975				871				777				690				612				750
Sum of PV of Free Cash Flow from Operations			116,283

2. Discounted Cash Flow Analysis — 45 MW Scenario

North Brawley

Depreciation Life		5-Year MACRS
Remaining Life			30
Existing Discount Rate			8.00	%
Tax Rate			40.75	%
Net Capacity (MW)		40 MW

						2011				2012				2013				2014				2015				2016				2017				2018				2019				2020				2021				2022				2023				2024				2025
Total Revenue							29,298				31,488				31,331				31,174				31,018				30,863				30,709				30,555				30,402				30,250				30,099				29,949				29,799				29,650				29,502
Less PPA penalties							(124	)			—				(2	)			(12	)			(21	)			(30	)			(40	)			(49	)			(58	)			(67	)			(76	)			(85	)			(94	)			(103	)			(112	)
Adjusted Revenue							29,174				31,488				31,328				31,162				30,997				30,833				30,669				30,506				30,345				30,184				30,023				29,864				29,705				29,547				29,390
O&M							19,363				8,929				9,047				9,166				9,284				9,403				9,522				9,761				10,005				10,255				10,511				10,774				11,043				11,319				11,602
Insurance							609				609				610				608				623				590				604				602				600				597				595				593				591				589				587
Property Tax							1,382				1,341				1,300				1,261				1,223				1,187				1,151				1,117				1,083				1,051				1,019				989				959				930				902
Royalties							1,186				1,260				1,253				1,247				1,241				1,235				1,228				1,222				1,216				1,210				1,204				1,198				1,192				1,186				1,180
G&A							870				892				914				937				960				984				1,009				1,034				1,060				1,087				1,114				1,142				1,170				1,199				1,229
Utilities, Environmental, Others							3,362				2,747				2,816				2,886				2,958				3,032				3,108				3,186				3,265				3,347				3,431				3,516				3,604				3,694				3,787
Total Operating Costs							26,772				15,777				15,940				16,105				16,291				16,432				16,623				16,921				17,229				17,546				17,874				18,211				18,559				18,918				19,287
Operating Costs ($/kW-year)							639.41				350.60				356.01				361.50				367.50				372.54				378.77				387.50				396.53				405.87				415.52				425.50				435.81				446.46				457.46
EBITDA							2,402				15,711				15,388				15,057				14,707				14,401				14,046				13,586				13,116				12,637				12,149				11,652				11,146				10,629				10,103
Depreciation							37,308				56,002				36,600				24,968				25,102				16,961				8,527				8,170				7,967				7,996				7,852				7,709				7,740				7,771				7,803
EBIT							(34,906	)			(40,291	)			(21,212	)			(9,912	)			(10,395	)			(2,560	)			5,520				5,416				5,149				4,642				4,297				3,943				3,406				2,858				2,300
Income Tax			40.7	%			(14,223	)			(16,417	)			(8,643	)			(4,039	)			(4,236	)			(1,043	)			2,249				2,207				2,098				1,891				1,751				1,607				1,388				1,165				937
After-tax Operating Profit							(20,683	)			(23,874	)			(12,569	)			(5,873	)			(6,160	)			(1,517	)			3,271				3,209				3,051				2,750				2,546				2,337				2,018				1,694				1,363
Plus: (Increase)/Decrease in Working Capital							(200	)			(1,109	)			27				28				29				25				30				38				39				40				41				41				42				43				44
Less: CAPEX							(11,620	)			(1,000	)			(1,025	)			(1,051	)			(1,077	)			(4,104	)			(1,131	)			(1,160	)			(1,189	)			(1,218	)			(1,249	)			(1,280	)			(1,312	)			(1,345	)			(1,379	)
Plus: Depreciation Benefit							37,308				56,002				36,600				24,968				25,102				16,961				8,527				8,170				7,967				7,996				7,852				7,709				7,740				7,771				7,803
Free Cash Flow from Operations							4,805				30,019				23,033				18,072				17,895				11,366				10,696				10,258				9,868				9,567				9,190				8,807				8,488				8,163				7,831
PV Periods							6.0				18.0				30.0				42.0				54.0				66.0				78.0				90.0				102.0				114.0				126.0				138.0				150.0				162.0				174.0
Discount Rate							8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%			8.00	%
PV Factor							0.9623				0.8910				0.8250				0.7639				0.7073				0.6549				0.6064				0.5615				0.5199				0.4814				0.4457				0.4127				0.3821				0.3538				0.3276
PV of Free Cash Flow from Operations							4,623				26,746				19,002				13,805				12,657				7,444				6,486				5,759				5,130				4,605				4,096				3,635				3,243				2,888				2,566
Sum of PV of Free Cash Flow from Operations			142,467