Ormat monetizing federal tax incentives for five geothermal plants in Nevada
Through a joint venture, Ormat effectively monetizing federal tax incentives for five geothermal plants in the state of Nevada, U.S.
In a release before the holidays, Ormat Technologies, Inc. “announced that Ormat Nevada Inc. (Ormat Nevada), and ORPD LLC (ORPD), through OrLeaf LLC, a jointly established new subsidiary, entered into a partnership transaction with a financial investor that will allow us to efficiently monetize the federal tax incentives relating to five geothermal power plants located in eastern Nevada.
The transaction involves the McGinness Hills geothermal power plant complex, and the Tuscarora and Jersey Valley geothermal power plants which, prior to the transaction, were wholly owned by Ormat Nevada, as well as the Don A. Campbell phase 2 geothermal power plant which, prior to the transaction, was part of the ORPD portfolio jointly owned 63.25% by Ormat Nevada and 36.75% by Northleaf Geothermal Holdings LLC, an affiliate of Northleaf Capital Partners.
As part of the transaction, the five geothermal power plants were transferred to a newly established limited liability company, and the investor purchased membership interests in the company for an initial purchase price of $62.1 million and for which it will pay additional installments that are expected to amount to approximately $21 million through 2022. Ormat Nevada’s share of the initial cash proceeds is $55.2 million.
“We are very pleased to announce the ongoing successful relationship with our capital partners, which started with the OPC transaction in 2011, continued with the ORTP transaction in 2013 and now continues with the financing of our East Nevada portfolio, in the current transaction,” said Mr. Isaac Angel, Chief Executive Officer of the Company. “This transaction allows us to efficiently monetize the federal tax incentives available to geothermal projects, such as Production Tax Credits, and generate value to our partners as well as to our shareholders.”
Source: Ormat release