Ormat increases geothermal operating portfolio to 1,100 MW
With the closed acquisition of the Dixie Valley and Beowave plants in Nevada, Ormat Technologies has now a total of 1,100 MW of operating geothermal capacity.
Earlier this month, Ormat Technologies reported having closed the acquisition of TG Geothermal Portfolio, LLC – we reported on it – , paying $171 million for 100% of the equity interests and assumed debt and associated lease obligations with a book value of approximately $206 million as of June 30, 2021.
Following the acquisition, Ormat now owns and operates two geothermal power plants in Nevada at Dixie Valley and Beowawe, with a total net generating capacity of approximately 67.5 MW. In addition, Ormat now owns rights to Coyote Canyon, a greenfield development asset adjacent to Dixie Valley with high resource potential and an underutilized transmission line, capable of handling between 300MW and 400MW of 230KV electricity, connecting Dixie Valley to California.
The operating assets sell power under existing power purchase agreements. Dixie Valley sells its electricity generation to Southern California Edison under a long term PPA expiring in 2038 and Beowawe sells its electricity generation to NV Power, Inc. under a PPA expiring in December 2025. Ormat plans to improve the acquired operating assets and implement synergies and cost reductions and expects these assets to generate $55 million in revenue and approximately $37 million in EBITDA in 2022.
“This acquisition further expands our leadership in the Western United States, increasing our generating capacity in Nevada and enabling us to bring clean, renewable energy to California through our newly purchased transmission line,” commented Doron Blachar, Ormat’s Chief Executive Officer. “We were able to take advantage of our strong balance sheet and established presence to add these attractive assets to our portfolio, and we expect to leverage our products segment capabilities and technology to increase the EBITDA of these plants by 20% over the next few years.”
On August 4, 2021, the Company will issue financial results for the second quarter of 2021, at which time it will provide a more comprehensive update on full year 2021 guidance inclusive of this acquisition.
Norton Rose Fulbright acted as Ormat’s legal advisor and Citi acted as its Financial Advisor.
Source: company release