EXHIBIT 10.1.8

                                 LOAN AGREEMENT

     THIS LOAN AGREEMENT (the "Agreement") is entered into as of October 1st
2003 by and between Ormat Technologies Inc. Delaware Corporation ("OTI" or
"Borrower") and Ormat Industries Ltd., an Israeli Corporation, ("Ormat" or
Lender") in effect from January 1st, 2003.

                                    RECITALS

A.   At Borrower's request, Ormat is willing to make a loan to Borrower.

B.   The parties desire or set forth their mutual understanding with respect to
     the loan.

     The parties therefore agree as follows:

1.   LOAN

     (a)       Lender hereby agrees to make a loan to Borrower in one or more
          advances up to a total aggregate amount of up to $150,000,000 USD (One
          Hundred & Fifty Million United States Dollars) (the "Loan"), pursuant
          to the terms and conditions set forth in this Agreement.

     (b)    If Borrower elects to borrow any funds from Lender, then within 5
          (five) business days of a written request from Borrower for an
          advance, Lender shall consider making such advance in accordance with
          the terms hereof. Lender shall note on Schedule A attached hereto the
          date and amount of each advance and the total of all unpaid advances
          shall be the outstanding balance of the Loan.

2.   USE OF PROCEEDS

          Borrower may use the proceeds of the Loan in connection with its
     general corporate activities and investments.




3.   PAYMENT

     (a)       Schedule B defines the repayment schedule by combining the
          advances made to an aggregate principle amount to be repaid on each
          due date ("Aggregate Amount") Borrower shall repay the Loan and
          accrued interest in accordance with Section 5 below in full in
          accordance with specific schedules agreed upon payment dates according
          to schedule B attached ("Minimum Repayment Dates") and in any event on
          or before June 5th, 2010.

     (b)       Upon repayment of the Loan and accrued interest, amounts repaid
          shall be applied first against costs, damages and expenses due Lender,
          then against amounts due for accrued interest and, thereafter, against
          overdue principle and then against the first principle Loan amounts
          becoming due, after the date of the prepayment, in accordance with
          Schedule B. A partial repayment of an Aggregate Amount shall be
          allocated in a pari passu manner between the Advances constituting
          that Aggregate Amount.

     (c)       Borrower may at any time, upon prior written notice of 2 (two)
          business days, prepay the Loan and accrued interest in whole or in
          part.

     (d)       All amounts payable hereunder shall be payable at the Lender's
          address listed below or other place of payment as directed by Lender.

4.   REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants to Lender as follows:

     (a)       Borrower is a company duly organized and validly existing under
          the laws of Delaware and is in good standing under the laws of that
          nation. Borrower has all requisite power and authority to own and
          lease its property, to conduct its business as presently conducted and
          to enter into and perform its obligations under this Agreement.



     (b)       This Agreement has been duly executed and delivered by Lender and
          constitutes valid and binding obligations of Borrower, enforceable in
          accordance with its terms, except as enforcement may be limited by
          applicable bankruptcy laws or other similar laws affecting creditors'
          rights generally.

     (c)       Borrower is not in violation or default of any provision of its
          organizational documents, of any indenture, agreement, instrument,
          judgment, order, writ, decree or contract to which it is a party or by
          which it or any of its properties, assets or rights is bound or
          affected or of any statute, rule or regulation applicable to Borrower
          which violation or default would have a material adverse effect on
          Borrower's business or property. The execution, delivery and
          performance of this Agreement by Borrower and the consummation of the
          transactions contemplated thereby will not result in any such
          violation by Borrower of, require any consent to be obtained by
          Borrower under, be in conflict with, or constitute, with or without
          the passage of time and giving of notice, either a default by Borrower
          under any such provision, instrument, judgment, order, writ, decree or
          contract or an event which results in the creation of any material
          lien, charge or encumbrance.

     (d)       There are no actions, suits, investigations or proceedings
          pending or, to the knowledge of Borrower, threatened against Borrower
          before or by any governmental department, commission board, bureau,
          agency or instrumentality, or before any arbitrator or arbitration
          board which may have a material adverse effect on the assets or
          financial condition of the Borrower.

5.   NATURE OF THE LOAN

     (a)       The loan and accrued interest shall be repaid in full on or
          before the Minimum Repayment Date, or as specifically stated in
          Schedule B per advance.




     (b)       Interest on the Loan shall be calculated on the balance from the
          date of the receipt of each advance until the date of payment at a
          rate per annum of Lender's average effective interest rate plus 0.3%
          percent in United States Dollars, which represents a rate of 7.5% for
          the advances made during year 2003. All computations of interest shall
          be made by the Lender on the year basis of 360 days.

     (c)       Borrower shall pay or cause to be paid all present and future
          taxes, duties and other charges of whatsoever nature levied or imposed
          by the government of Israel or any jurisdiction through or out of
          which a payment is made on or in connection with any and all amounts
          due under this Agreement,

               All payments of principal and interest due under this Agreement
          shall be made without deduction for or on account, and free and clear,
          of any such taxes, duties or other charges other than withholding
          income tax pertaining to the Lender, if applicable in the Borrower's
          country and provided that Borrower will provide a certificate
          indicating such a transaction.

     (d)       Nothing contained in this Agreement shall impair the validity of
          the Loan or in any way impair the rights of Lender to exercise all
          remedies available to it under law.

6.   DEFAULT

               The occurrence of one or more of the following events shall
          constitute a default under this Agreement ("Event of Default").

     (a)       Borrower's failure to pay the Loan and accrued interest in full
          or in part as it becomes due and payable, and such failure shall not
          be cured within 10 (ten) business days after Lender gives written
          notice thereof to Borrower;




     (b)       Borrower's failure to comply with any of its obligations an
          undertakings under this Agreement;

     (c)       Any representation, warranty or covenant made herein shall prove
          to have been false or misleading in any material respect when made;

     (d)       Borrower's application for, consent to or acquiescence in the
          appointment of a trustee, receiver, liquidator, assignee, or other
          similar official Borrower or

               Borrower's property, or the making of a general assignment for
          the benefit of creditors, or the filing of a petition or an answer
          seeking reorganization in proceeding under any bankruptcy or other
          insolvency law, or the making of an agreement, composition, extension
          or adjustment with its creditors; or

     (e)       Any bankruptcy, reorganization, debt arrangement or other
          proceeding under any bankruptcy or other insolvency law being
          instituted by or Borrower and not dismissed within 60 (sixty) days
          thereafter.

7.   REMEDIES

               Upon the occurrence of an Event of Default hereunder, all amounts
          outstanding under the Loan and accrued interest shall, at the option
          of Lender, become immediately due and payable upon Lender's written
          notice to Borrower. If Lender elects to declare all amounts
          immediately due and payable, then Lender shall be entitled to exercise
          all rights and remedies available to it under law. In addition, upon
          the occurrence of an Event of Default and so long as such Event of
          Default is continuing, Lender shall be under no obligation to make
          additional advances pursuant to Subsection 2(b) above.

8.   NOTICE

               Any notice, request, instruction or other document to be given
          hereunder by a party hereto shall be in writing, delivered in person,
          or mailed by certified or




          registered mail, return receipt requested, or transmitted by facsimile
          transmission with electronic confirmation of receipt to the
          addressee's address or facsimile number set forth below (or such other
          address of facsimile number as the party changing its address
          specifies in a notice to the other parties):

               If to Ormat Technologies Inc.
               980 Greg Street
               Sparks, NV 89431-6030, USA
               Attention: President
               Telephone:  1-702-356-9029
               Facsimile:  1-702-356-9039

               If to Ormat Industries Ltd.
               P.O. Box 68
               Yavne 81100 Israel
               Attention:  President
               Telephone:  972-8-9433702
               Facsimile:  972-8-9439901

          Notice shall be deemed given the earlier of when actually received and
          three days after Notice is sent in accordance with the above.

9.   MODIFICATION; ENTIRE AGREEMENT; TERMINATION OF PRIOR AGREEMENT

               No change or modification of this Agreement shall be valid unless
          it is in writing and signed by both Lender and Borrower. This
          Agreement sets forth the entire agreement and understanding among the
          parties as to the subject matter treated herein and merges and
          supersedes all prior discussions, agreements and understandings.

10.  INVALID PROVISION

               The invalidity or unenforceability of any provision of this
          Agreement shall not affect



          the other provisions, hereof, and this Agreement shall be construed in
          all respects as if such invalid or unenforceable provisions were
          omitted.

11.  INTERPRETATION

               This Agreement and each of the terms and provisions hereof are
          deemed to have been explicitly negotiated among the parties and the
          language in all parts of this Agreement shall in all cases be
          construed according to its fair meaning and not strictly for or
          against any party.

12.  COUNTERPARTS

               This Agreement May be signed in two or more counterparts, each of
          which shall be deemed an original, and all of which, taken together
          shall be deemed one and the same document.

13.  APPLICABLE LAW

               This Agreement shall be governed by, and interpreted and
          construed under the laws of Israel.

14.  EXPENSES AND ATTORNEY'S FEES

               In the event that any party to this Agreement brings an action or
          proceeding for the declaration of rights of the parties hereunder, for
          injunctive relief, for an alleged breach or default of or any other
          action arising out of this Agreement, the non-prevailing party in any
          action pursued in courts of competent jurisdiction (the finality of
          which is not legally contested) shall pay to the prevailing party all
          reasonable costs, damages, and expenses including attorney's fees
          expended or incurred in connection therewith.

15.  SURVIVAL

               The representations, warranties, covenants and agreement made by
          the parties hereto in this Agreement shall survive the closing of the
          transactions contemplated by this Agreement.



16.  SUCCESSORS AND ASSIGNS

               Except as otherwise expressly provided in this Agreement, the
          provisions of this Agreement shall insure to the benefit of, and be
          binding upon, the successors an designs of the parties to this
          Agreement; provided that Lender shall not be obligated to make
          advances under Section 1 of this Agreement to any successor or assign
          of Borrower, but may do so pursuant to the terms of this Agreement as
          Lender's sole discretion.

17.  TITLES

               The titles of the Sections of this Agreement are for convenience
          of reference only and are not to be considered in construing this
          Agreement.

               IN WITNESS WHEREOF, the parties hereto make this Agreement as of
          the date first set forth above.

                                       ORMAT TECHNOLOGIES, INC.

                                       By:  /s/ Connie Stechman
                                           ------------------------------------

                                       Its: Vice President
                                           ------------------------------------

                                       ORMAT INDUSTRIES LTD.

                                       By:  /s/ Indecipherable
                                           ------------------------------------

                                       Its: Managing Director
                                           ------------------------------------