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July 15, 2021updated 23 Nov 2021 6:26pm

Ormat acquires Terra-Gen subsidiary TG Geothermal Portfolio

The acquisition supports Ormat’s goal to reach 1GW of combined capacity.

By Umesh Ellichipuram

US-based geothermal company Ormat Technologies has completed its previously announced acquisition of TG Geothermal Portfolio, a subsidiary of Terra-Gen.

In May, Ormat agreed to acquire the company by paying $171m for all its equity interests, assumed debt and associated lease obligations with a book value of $206m.

With the deal’s completion, Ormat will own and operate two geothermal power plants at Dixie Valley and Beowawe, Nevada, with a combined net generating capacity of around 67.5MW.

Both plants currently have power purchase agreements (PPAs) in place.

With a 56MW net capacity, Dixie Valley is one of Nevada’s largest geothermal power plants. The plant sells power to Southern California Edison (SCE) under a long-term PPA due to expire in 2038.

Electricity generated by the 11.5MW Beowawe geothermal power plant is sold to NV Power under a PPA due to expire in December 2025.

Ormat also owns other assets, including the rights to Coyote Canyon, a greenfield development asset adjacent to Dixie Valley, and an underutilised transmission line that connects Dixie Valley to California.

The transmission line has the capacity to handle between 300MW and 400MW of 230KV electricity.

The acquisition is in line with Ormat’s strategic goal of enhancing its electricity segment through organic growth and mergers and acquisitions. It also supports the company’s goal of reaching 1GW of combined capacity.

Ormat CEO Doron Blachar said: “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.

“We were able to take advantage of our strong balance sheet and established presence to add these attractive assets to our portfolio.

“We expect to use our products segment capabilities and technology to increase the earnings before interest, tax, depreciation and amortisation (EBITDA) of these plants by 20% over the next few years.”

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