Ormat Technologies, a Nevada-based renewables developer, has agreed to acquire a 150MW portfolio of geothermal and solar assets from Italian company Enel’s subsidiary Enel Green Power North America for $271m.
The portfolio includes two operating geothermal power plants, one triple hybrid geothermal, solar photovoltaic (PV) project with 20MW capacity, a 43MW solar thermal project, two solar projects with a total capacity of 40MW and two greenfield development assets.
The acquisition will support Ormat’s goal of expanding its strategic portfolio.
The transaction could be completed by the first quarter of 2024. It is in line with Ormat’s priorities and will leverage asset rotation to support the development of future projects while simplifying its structure.
The transaction will see Enel selling its entire geothermal portfolio in the US, including the 25MW Cove Fort geothermal power plant in Beaver County, Utah. It was designed by Ormat and sells power under a long-term power purchase agreement (PPA) to the Salt River Project, an Arizona-based utilities company.
The second geothermal power plant being sold is Salt Wells in Churchill County, Nevada, with 65MW capacity. Operational since 2009, its power is sold to NV Energy under a long-term PPA.
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Stillwater hybrid geothermal and solar is a triple hybrid power plant that includes a 33MW geothermal binary unit, a 26MW solar PV plant and a 2MW solar thermal plant.
Co-located with the Stillwater hybrid geothermal and solar facility, Stillwater Solar II is a 27MW solar PV project. Its power is sold to Wynn Las Vegas.
Another solar project within the portfolio is the 24.5MW Woods Hill Solar PV Park in Windham County, Connecticut.
Its power is sold to seven different off-takers under a long-term PPA.
Ormat is also acquiring the rights to develop two greenfield projects, one of which will be built next to the Cove Fort project and another in California’s geothermal resource area.
Ormat Technologies CEO Doron Blachar stated: “We are excited to announce this strategic acquisition, marking a significant milestone for Ormat as we expand our generating capacity portfolio and expand our footprint in the renewable energy sector.
“We are confident that this accretive acquisition, which carries approximately an 8 times EV/EBITDA [enterprise value to earnings before interest, taxes, depreciation and amortisation ratio] multiple (inclusive of the future planned enhancement and optimisation but excluding the Cove Fort expansion), will support both our short and long-term growth plans, further leveraging our unique core capabilities to maximise the efficiency and output from these power plants’ energy sources, strengthening our financial position, and delivering meaningful value to our investors.
“This transaction demonstrates our commitment to environmental stewardship, economic growth and a greener, more sustainable future for all, aligning seamlessly with our business strategy of pursuing accretive mergers and acquisitions transactions alongside organic growth.”