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Ormat closes $59m partnership transaction for McGinness Hills Ph. 3 geothermal plant

McGuinnes Hills geothermal plant, Nevada (source: Ormat)
Alexander Richter 21 Aug 2019

A private investor has acquired a $59.3 m membership interest in the 48 MW McGinness Hills Phase 3 geothermal power plant that started operation in December 2018.

In a release today, Ormat Technologies Inc. announced that one of its wholly owned subsidiaries that owns the 48MW McGinness Hills Phase 3 Geothermal power plant entered into a partnership agreement with a private investor.

Under the transaction documents, the private investor acquired membership interests in the project for an initial purchase price of approximately $59.3 million and for which it will pay additional annual instalments that are expected to amount to a total of approximately $9 million. Ormat will continue to operate and maintain the power plant and will receive substantially all of the distributable cash flow generated by the power plant, and the private investor will receive substantially all of the tax attributes.

“Ormat continues to deploy creative financing structures to augment our low cost of growth capital, including the OPC transaction in 2011, the ORTP transaction in 2013, the OPAL transaction in 2016, the Tungsten Mountain transaction last year and now the current transaction relating to the McGinness Hills Phase 3,” said Isaac Angel, Chief Executive Officer of the Company. “This transaction allows us to efficiently utilize tax incentives available to geothermal projects and create value for our shareholders.”

The McGinness Hills Phase 3 geothermal power plant, located in Lander County, Nevada, began commercial operation on December 15, 2018. The project sells its power under the 26-year Ormat Northern Nevada Geothermal Portfolio Power Purchase Agreement with Southern California Public Power Authority, which was announced in June 2017.

Source: Company release