Note 5 - Investment in an Unconsolidated Company

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

NOTE 5 — Investment in unconsolidated companies

Investment in unconsolidated companies mainly consists of the following:

	December 31,
	2019		2018
	(Dollars in thousands)
Sarulla	$	70,589	$	71,983
Ijen		10,551		—
Total investment in unconsolidated companies	$	81,140	$	71,983

The Sarulla Complex

The Company holds a 12.75% equity interest in a consortium that developed the 330 MW Sarulla geothermal power plant project in Tapanuli Utara, North Sumatra, Indonesia. The Sarulla project is comprised of three separately constructed 110 MW units, the most recent of which, NIL 2, was completed in April 2018. The Sarulla project is owned and operated by the consortium members under the framework of a joint operating contract and energy sales contract that were both executed on April 4, 2013. Under the joint operating contract, PT Pertamina Geothermal Energy, the concession holder for the project, provided the consortium with the right to use the geothermal field, and under the energy sales contract, PT PLN, the state electric utility, is the off-taker at the Sarulla complex for a period of 30 years.

During the years ended December 31, 2019 and 2018, the Company made additional cash equity investments in the Sarulla complex of approximately $0.0 million and $3.8 million, respectively, for a total of $62.0 million since inception.

The Sarulla consortium entered into interest rate swap agreements with various international banks, effective as of June 4, 2014, and accounted for the interest rate swap as a cash flow hedge upon which changes in the fair value of the hedging instrument, relative to the effective portion, are recorded in other comprehensive income. The Company’s share of such gains (losses) recorded in other comprehensive income (loss) are as follows:

	Year Ended December 31,
	2019			2018
	(Dollars in thousands)
Change, net of deferred tax, in unrealized gains (losses) in respect of the Company’s share in derivative instruments of unconsolidated investment	$	(3,417	)	$	2,235

The related accumulated loss recorded by the Company under accumulated other comprehensive income (loss) as of December 31, 2019 and 2018 was $6.3 million and $2.9 million, respectively.

The Ijen Project

For details on the Ijen project, please see Note 2 to the consolidated financial statements under the heading "Ijen transaction".