April 1, 2011 / 12:04 PM / in 7 years

UPDATE 2-Ram Power Q4 loss narrows, sees higher costs in Nicaragua

* Expects to spend about $175 mln on expansion of flagship

* Says secured credit facility of $185 mln for Phase 1

* Expects to start getting revenue from San Jacinto in 2011

* Q4 loss/shr $0.03 vs loss/shr $0.13 year ago

* Q4 rev rises 8 pct to $1.2 million (Adds outlook details, share milestone)

April 1 (Reuters) - Ram Power Corp reported a narrower quarterly loss on lower expenses, but the renewable energy company expects expenses to rise over the next two years as it gears up to record revenue from its flagship project in Nicaragua.

The Canadian company, which has geothermal operations in California, Nevada and Canada, expects to spend about $175 million on the expansion of the delayed San Jacinto-Tizate project.

In February, Chief Executive Hezy Ram had quit after the company said the project was delayed by three months and cost extra $50 million due to higher labour and material costs. Walt Higgins took over as interim CEO. [ID:nN14112753]

Ram Power expects to record revenue for the first time from the energy sale from the project in 2011 and plans to execute debt financing for the project in the third quarter of 2011.

Geothermal power developers pipe steam and hot water trapped deep in the earth to the surface, where it is used to drive turbines to produce electricity.

Projects like these are initially more expensive to develop than wind or solar projects, which makes it difficult for small companies to secure financing for construction.

The company said it secured about $185 million of credit facilities to cover the projected expenditures for the first phase of the project.

It said availability of the second phase credit facility of about $160 million is subject to increasing the certified resource from 59-82 megawatts.

For the October-December quarter, company’s net loss narrowed to $3.4 million, or 3 cents a share, from $15.4 million, or 13 cents a share, a year ago.

Expenses fell 27 percent to $5.5 million.

Revenue rose 8 percent to $1.2 million.

Shares of the Reno, Nevada-based company closed at C$1.32 on Thursday on the Toronto Stock Exchange. They have lost 53 percent in value in the last year. (Reporting by Amruta Sabnis in Bangalore; Editing by Don Sebastian)

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