Ormat agrees equity financing deal for 5 Nevada geothermal plants

Reno, Nevada-based Ormat Technologies Inc (NYSE:ORA) this week announced a deal with a financial investor to monetise the federal tax incentives relating to five geothermal power plants in eastern Nevada.

According to a filing with the Securities and Exchange Commission (SEC) on Thursday, the investor is JPM Capital Corp.

The transaction covers the McGinness Hills geothermal power plant complex and the Tuscarora and Jersey Valley geothermal power plants which until now were wholly owned by Ormat Nevada, a 100% subsidiary of Ormat, as well as the Don A Campbell phase 2 geothermal power plant which was jointly owned by Ormat Nevada and an affiliate of Northleaf Capital Partners.

The five geothermal power plants were transferred to a newly-created company. The investor bought membership interests in that company for an initial price of USD 62.1 million (EUR 59.5m) and will pay additional installments of an estimated USD 21 million through 2022. The share of Ormat Nevada of the initial cash proceeds is USD 55.2 million.

"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," said Ormat chief executive Isaac Angel.

(USD 1.0 = EUR 0.959)

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