Ormat Technologies, Inc.

Mary McCaffrey – KCSA Strategic Communications, IR Dita Bronicki – President and CEO Yoram Bronicki – COO of North America Joseph Tenne – CFO

Ben Kallo – Stanford Group Michael Lapides – Goldman Sachs Emily Christy – RBC Capital Markets Charles Fishman – Piper Jaffray Angie Storozynski – Macquarie Daniel Mannes – Avondale Brian Yerger – Jesup and Lamont Vijay Singh – Janco Partners

Thank you, Jackie, and thank you all for joining us today. This is Mary McCaffrey with KCSA Strategic Communications, Investors Relations Consultant to Ormat Technologies.

At this point you should have all received the second quarter 2008 earnings press release. If you have not received the release, please refer to Ormat’s corporate website at www.ormat.com.

Hosting the call today are Dita Bronicki, Chief Executive Officer; Yoram Bronicki, President and Chief Operating Officer; Joseph Tenne, Ormat’s Chief Financial Officer; and Smadar Lavi, Vice President of Corporate Finance and Investor Relations. Before we begin, we would like to remind you that information provided during this call 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 company’s plans, objectives, and expectations for future operations and are based on 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, please see Risk Factors as described in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5th, 2008. In addition, during this call, statements may be made that include a financial measured defined as non-GAAP financial measures by the Securities and Exchange Commission such as adjusted EBITDA.

This measure may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with GAAP.

Management of Ormat Technologies believes that adjusted EBITDA may provide meaningful supplemental information regarding liquidity measurement that both management and investors benefit from referring to this non-GAAP financial measure in assessing Ormat Technologies' liquidity and when planning future or forecasting periods. This non-GAAP financial measure may also facilitate management’s internal comparison to the company’s historical liquidity.

Before I turn the call over to management, I would like to mention that a slide presentation accompanies this call and can be accessed on Ormat’s website under the event as sound in the Investor Relations tab. With that said, I would like to now turn the call over to Dita, Yoram and Joseph who would like to make some formal remarks and review the financials.

Following these remarks, management would be glad to answer any questions that you many have. Dita, the call is yours.

Thank you, Mary McCaffrey [ph] and good morning everyone. Thank you for joining us today.

Let us begin on slide four. The quarter and half year points were characterized by good result, accompanied with construction and exploration program to continue on track.

We had another strong performance in our electricity segment during both periods despite our performing maintenance on several projects. The second quarter in particular had substantial maintenance work and the project shutdown for enhancement CapEx [ph].

The strong hold that we were able to achieve was the result of additional capacity we had added over the last two years which outgrew these expenses. We achieved 11.6% goal in electricity on a year over year basis and 22.5% when comparing electricity segment revenues from the first half of 2008 to the same period in 2007.

Turning to slide five, another important achievement is that we have built a strong backlog in our Product segment. Since the beginning of the year, we received backlog of approximately $176 million for supply and construction of recoverable energy generation and Geothermal Power plant, including $66 million that is still subject to a noticeable fee.

These product orders are globally (inaudible) with new build in New Zealand, Turkey and the United States which shows that the need for clean energy is a growing and global concern. On construction activities, we remain on schedule through the full quarter and we expect to have 101 megawatts on line by the end of the year.

The projects for 2009 and beyond also remain on schedule.

As you will see, our construction program, which Yoram will talk about in more detail in just a bit and our exploration activities remain robust. We also added to our capital provision which is an important component of our property.

As presented on slide six, we closed the second Tax Monetization deal that we entered into last year from which we will receive $64 million. We also receive approximately $150 million made from the sale of 12.1 million shares of common stock in a block play to Lehman Brothers.

This gave us additional funds that delayed our need to save into our corporate line of credit. This additional capital created (inaudible) so that we are well insulated from possible issues in the financing market (inaudible).

We have no capital constraints to move forward with the (inaudible) construction program and our ability to secure funding to help us initiate future programs remain strong. And let's move to slide seven.

Looking at the regulatory environment, while we are optimistic that the production facilities will be extended, the question still remains to win. The tax credit at year end (inaudible).

However, given that it is an election year, we may not see such until after the November election.

Thank you Dita and good morning everyone. We would like to begin with slide nine.

We had a good quarter and a first half in terms of energy production. In the US, our generation was up 3.6% quarterly and 16.1% on a semi-annual basis, excluding the mammoth generation.

The Steamboat repowering project is progress very well. We have already placed half of the turbines in service and expect completion before the end of the quarter.

And the generator failure will have a more pronounced impact on the third quarter generation, but we expect to complete the repairs still this month. Moving to slide ten, our major capital project is on tract to add an additional 174 megawatts by the end of 2009 or in early 2010.

Throughout the rest of 2008, we expect to add approximately 101 megawatts. The projects coming on line in the second half of this year or early 2009 are 50 megawatts from the North Brawley project and 35 megawatts from the phase II of the Olkaria project in Kenya.

In addition, we expect 11 megawatts from OREG II and five megawatts from the GDL project in New Zealand. In 2009 and in early 2010, we expect additional 73 megawatts of capacity in the following projects.

50 megawatts at East Brawley, 11 megawatts from the remaining OREG II facility, eight megawatts from the Puna expansion, and four megawatts from the Peetz recovered energy project. Now to the next slide.

The projects beyond 2009 are mostly in exploration and development stages and include work to develop between 18 and 30 megawatts plant from our Buffalo and Grass Valley project. We also expect to develop 30 to 40 megawatts project in Carson Lake, Nevada, for which we will retain 50% ownership.

Last week, the Nevada PUC approved their joint venture with Nevada Power relating to this project. Additional we have signed a PPA in California for Imperial Valley project that we expect will be 30 and 100 megawatts, and is expected to be completed by 2012.

We also plan to increase the generation capacity of the Mammoth plant by 20 to 30 megawatts where our share will be 50%. And an update on our Sarulla project is on slide twelve.

Our interest in the consortium was formally reduced to a 12.75%, when in July PLM, the state power company approved the entry of Kyushu Electric Power Company to the consortium. With the current progress in the financing activities, we expect construction to start only in the second half of 2009.

Looking ahead, our product segment is on the next slide. We have had a good deal of interest in both our Geothermal and Recovered Energy solution.

In July, we entered into an engineering procurement and construction contract valued at approximately $42 million for the construction of Geothermal Power plant in New Zealand. We have previously worked with the owner of the plant, Contact Energy Limited, which are New Zealand's largest geothermal power plant owner and operator.

We are also the equipment supplier for a new geothermal power plant in Turkey. The contract value for this project is approximately $16 million.

Then to recap, since the beginning of the year we entered into four EPC contracts which are listed in the presentation and include a $76 million EPC contract with Nevada Geothermal Power for a geothermal project, a six megawatt REG power plant for Nevada Power, a 5.3 megawatt REG power plant in Minnesota, and the New Zealand contract mentioned earlier.

Thank you and I will now turn the call to our CFO, Joseph Tenne. Joseph?

Now to slide nineteen. Combined gross margins were 28.7% in the second quarter of 2008 compared to 29.2% in the second quarter of 2007.

Gross margin for the electricity segment was 32.8% for this quarter compared to 36.2% for the same quarter last year. Product segment gross margin was 14.9% in this quarter of 2008 compared to 15.6% in the same quarter last year.

Moving to slide twenty. For the second quarter of 2008 net income of $12.2 million or $0.28 per share as compared to net income of$8.5 million or $0.22 per share for the second quarter of 2008 [ph].

Now to slide nineteen. Combined gross margins were 28.7% in the second quarter of 2008 compared to 29.2% in the second quarter of 2007.

Gross margin for the electricity segment was 32.8% for this quarter compared to 36.2% for the same quarter last year. Product segment gross margin was 14.9% in this quarter of 2008 compared to 15.6% in the same quarter last year.

Moving to slide twenty. For the second quarter of 2008 net income of $12.2 million or $0.28 per share as compared to net income of$8.5 million or $0.22 per share for the second quarter of 2008 [ph].

Now to slide nineteen. Combined gross margins were 28.7% in the second quarter of 2008 compared to 29.2% in the second quarter of 2007.

Gross margin for the electricity segment was 32.8% for this quarter compared to 36.2% for the same quarter last year. Product segment gross margin was 14.9% in this quarter of 2008 compared to 15.6% in the same quarter last year.

Moving to slide twenty. For the second quarter of 2008 net income of $12.2 million or $0.28 per share as compared to net income of$8.5 million or $0.22 per share for the second quarter of 2008 [ph].

Net income for the second quarter of 2008 and 2007, both includes stock-based compensation related to stock options of $1 million. On slide 21, adjusted EBITDA for the quarter was $29.2 million as compared with $30.6 million for the same quarter in 2007.

Adjusted EBITDA includes consolidated EBITDA and the company's share in operating income and depreciation and amortization, totaling $1.3 million and $4 million for the quarters ended June 30, 2008 and 2007 respectively related to the company's 50% interest in the Mammoth project in California. Additionally the 2007 period includes our consolidated interest in the Leyte Project in the Philippines which transitions back to the Philippines government in September 2007.

In addition, we have $3.1 million and $2.8 million of marketable securities as of June 30, 2008 and December 31, 2007 respectively classified as noncurrent assets. This specification is due to auction in the first quarter of 2007 of certain auction rate securities in our portfolio.

In the next accompanying slide, we present our total long-term debt as of the end of the second quarter of 2008 and the payment schedule.

In addition, we have $3.1 million and $2.8 million of marketable securities as of June 30, 2008 and December 31, 2007 respectively classified as noncurrent assets. This specification is due to auction in the first quarter of 2007 of certain auction rate securities in our portfolio.

In the next accompanying slide, we present our total long-term debt as of the end of the second quarter of 2008 and the payment schedule.

If you will turn to the last slide regarding the revenue guidance for 2008, we increased our guidance for electricity segment and expect our Electricity segment revenues to be $250 million. We also expect an additional $9 million of revenues from our share of electricity revenues generated by a subsidiary which is accounted for under the equity method.

With respect to our products segment, we maintain our expected revenues of between $70 million and $80 million for 2008.

Thank you again for joining us on this call, we will be happy to take your questions now. Jackie, please.

Thank you again for joining us on this call, we will be happy to take your questions now. Jackie, please.

Good morning.

Good morning.

Could you give us some detail on what affected product segment gross margin this quarter? And then I know we have talked in the past you kind of gave some rough guidance about where that margin should go, trend towards?

And could you update us on that?

Well, I think that the product segment margins behaved as we expected them to behave, and our expectations for the whole year remain unchanged, I think we correlate the level of 2005 in the order of 20% or little more. And no change there.

And the volume and the mix is what creates the result.

Okay. On the electricity segment, how should we – it looks like margins kind of jumped around a lot there.

How should we think about going forward? I know Q3 tends to be strong, and maybe if you give some update on Steamboat, how that will affect margin?

And then Q4, I think – hello.

I hear you.

And then maybe in Q4, an update on what those margins typically are in the electricity side? Are we doing more maintenance maybe in Q4, or I know there is some shutdown maybe at Puna there.

Okay, good. And then on the Steamboat, the decision to replay four turbines, I know in the last call you talked about replacing two turbines.

What made you replay four turbines instead of two?

No I don't think – this is Yoram. I don't think we said we'll replace two.

There are four turbines in the Steamboat 2 and 3 complex and we're guiding them out and putting new equipment in.

Maybe the confusion with Steamboat project, Steamboat 2 and Steamboat 3, so maybe this caused the confusion but it's four turbines in total, two in each project.

Okay. Okay.

And then when was that construction affecting Steamboat 3 and 4 that started in early July or did it started within Q2?

No, it started in Q2, actually towards the end of May I think is when we started taking equipment down.

Okay. And then as far as the update on the electricity segment's revenue, how much of that $5 million is related to higher revenue at Puna?

A big pulp.

Okay. So you're getting benefit from high oil prices here and could you remind me how often that resets the electricity prices?

Once a quarter.

Okay, once a quarter. Okay, I'll jump back in queue then.

Thank you.

Thank you.

Hey guys, congratulations on a good quarter. Just want to – when I go back and look at slides 11 and 12 I think the projects under development, can you walk us through which ones are incremental to the same slides you presented at first quarter.

I don't remember what we have in the third quarter but I believe that Mammoth was not included in the prior quarter, and I don't know about the Imperial Valley. Madel [ph] can you help on that?

Two semi projects say added to the slide, Imperial Valley is a project that we signed for a contract for 2012 and the other one is Mammoth.

Got it. Okay.

Other question, how – when you think about Sarulla, what is the timeframe for the different stages or different legs of Sarulla that come on line?

Got it. Thank you.

Okay. And then turning to the international scene.

You know a number of countries recently have higher interest in geothermal energy as a bigger portion of their country's electricity. What kind of opportunities do you see there as opposed to a year ago?

Did you see a project portfolio shift towards international versus US or how do you look at that?

Okay. Thank you very much.

Good morning. On OREG 1, you indicated that the – we're experiencing lower availability.

And is that coming off a pipeline. I would think that resources pretty well define, and I guess why would that occur and you expected on the other three facilities.

You could address that. And I guess why is it not material to revenue?

Were you able to just overcome it or is it just because it's so small?

But this really doesn't change your outlook on these recoverable energy generation units. You still think that's a very viable market?

Yes, I think that there are many reasons towards additional uses of natural – additional use of natural gas. We view it as a way short term way to address greenhouse emissions.

So, natural gas will be consumed. This is a net or this is a way to significantly reduce the amount of emissions that power generation is making.

So, it certainly works hand in hand with anything else that happens in trying to deal with greenhouse gases.

Correct. Correct.

Thank you.

Yes, thank you. I have two questions.

First of all given that you continue buying geothermal acreage and I understand that you have to have some geological studies of the acreage to assess the geothermal potential of the lands you're buying. Would it be possible for you guys to disclose what is the geothermal potential of the land that you're holding?

That's one. And secondly, how about your growth strategy?

I mean I didn't hear you say anything about the 100 megawatts per annum long term growth, looking at your projects under development, it seems like you may reach this goal over the next maybe two years, longer term we don't have much of a visibility. Should we infer that those acreage – the acreage that you're buying is going to allow you to grow at 100 megawatts per annum or should we instead assume that you need to simply acquire some other players or potential existing asset to get to this 100 megawatts per annum, and any comments on that?

Okay, and one more. Given that there seems to be many megawatts to be added by the end of the year.

Yoram mentioned that some of the developments may stretch until the first quarter of 2009 and we have the exploration of the PDC by the end of the year, and then even though as you mentioned the ITC is there, it reverts back to 10% only. How likely is it that some of the projects will not be eligible for those subsidies and if so, do you have any clauses in your signed PPAs that would help your margins in case the project do not qualify for the subsidies.

Okay, thank you.

Good morning.

Good morning Dan.

So, just so I understand, when you say half the complex, I mean it's two sets of two turbines at 2 and 3. So for instance, from unit 2 off which is I think 23 megs for three months and it will be the same thing for unit 3?

Yeah, we started with Steamboat 3. In summer conditions, I think that the impact of taking Steamboat 3 down is close to 10 megawatts.

(inaudible)

Okay. Briefly just on the FX, just so I understand where the FX kicks in, is that because of the cost of construction on your product side which is really employees or is there some other FX through the system.

You said until now, does that mean it's changing or does that mean...

I don't know.

Okay.

I don't know.

Okay, great. Thank you very much.

Good afternoon. Thanks for taking my call.

I just have two questions on the international side. First could you give us any visibility on the financing announcement for the Sarulla project?

Do you have any timing there or when that will be completed?

Okay. Second question would be, what is your competitive positioning in Kenya?

I noted the President had announced very favorable towards more development of geothermal in Kenya. Do you have a lot of competition there?

Do you expect it to, over the next couple of years, to secure some more projects in Kenya? What is your positioning there?

Okay. Thank you.

Hi good morning.

Good morning.

My question is on OPC like transactions if you're looking to monetize tax credit. With the current PTC uncertainty and the financial conditions of some of your prospective investors who are probably taking write-offs of their own.

Is that impeding in any way to do more OPC types of transactions on all?

The market is still there for tax monetization transactions. We are actually talking now about monetizing the value of North Brawley.

The market is there.

Okay. Okay, great.

Thanks, that's all I have.

Hi guys. I had one follow-up question or actually two follow-up questions.

Sales and marketing seemed to tick down quite a bit in this quarter. Is that something we should expect going forward?

Mainly related and we said it in the 10-Q which is with the (inaudible). It's mainly related to the product segment because most of marketing and selling expenses are related to that part.

And since it went down this quarter, the expense is also down. It's something that usually would be straight forward in the next quarter.

Okay. And then on I guess a broader question is, you talked earlier about the competition getting a little stiffer in securing land.

How does that work? How are you seeing your investment returns look with that, and then also with the higher prices for electricity prices and then I guess higher costs for raw materials?

So how does all of that stuff offset each other as far as your project returns go?

So as far as project returns go, I think what mid-teens is what we've talked about before. Is that similar to what you guys are seeing now?

Okay, great. Thank you.

Thank you.

Just a follow-up on the leases. Dita, you said the consultants in your own management was not excited about the quality of the leases.

Is that the depth, the temperature, was all of the above, or was just in relation to the prices that they went for, or could you give us a little more color on that?

No, even before the prices, if you get which have restrictions on sources of the leases for example. It's a different quality than the lease which is unrestricted.

The level of prior work which was done on the leases, where do we think is the center of the anomaly in which leases was too doubtful bid, all these factors will affect quality of the leases.

You still have enough backlog of property though the Peetz additional rigs that you recently purchased fro quite some time?

Absolutely.

Okay. Thank you.

But do you think that we should assume that for instance your electric margins may in a way come down because having utility as a partner, there is a potential of transfer of risks and see the margins can compress. Is that –

I don't see any relationship between the two. No.

Okay. Thank you.

Hi Dita, quick question. Kind of stay away a little bit from some of the operational items and revenue margin stuff, but I want to come back to financing.

Can you talk a little bit about your financing plans back end of '08 through '09, you are sitting on a decent amount of cash while your free cash flow levels aren't so amazing, your debt to cap is relatively low compared to historical for you guys. Just kind of curious in terms of how you plan on balancing debt to equity etcetera to finance your growth?

Got it. Thank you.

I would like to thank you for your interest on this call. I think that it was a pleasure to have a high level discussion with all of you, and for your continued support in the company.

Thank you all.