Cindrigo acquires geothermal co in Central Europe, sets 1-GW target

Renewables developer Cindrigo Holdings Ltd (LON:CINH) has made use of an option to take over Energy Co-invest Global Corp (ECG), a geothermal energy specialist with an initial project portfolio in the Pannonian Basin of Central Europe.

The acquisition is part of Cindrigo’s strategy to broaden its business into new renewable energy sectors and geographies, it said in a statement on Monday. Cindrigo will initially focus on geothermal power assets in Central Europe and secondly in the European Union (EU) periphery but will also consider “select non-EU jurisdictions with strong energy sectors.”

The company seeks to secure contracts for geothermal power projects with up to 200 MW of installed capacity within a year, up to 450 MW within three years and 1,000 MW by 2030. It noted though that it will need to raise debt and equity finance for this purpose.

The newly-acquired firm has three geothermal licence blocks in Croatia, each for a planned capacity of around 20 MW and the potential for on-site expansion and additional blocks for a 100 MW target. The first of the plants is seen to become operational by next year. Each project is estimated to annually contribute earnings before interest, tax, depreciation and amortisation (EBITDA) of GBP 12 million (USD 15.8m/EUR 14.3m).

ECG is also the largest shareholder of geothermal-focused engineering, procurement and construction (EPC) contractor GEG ehf. The latter is a project owner based in Reykjavik, Iceland, with rights over certain projects in Chile and Kenya.

"Alongside ECG's established portfolio, there is a plethora of countries in our sights which have plentiful, yet underdeveloped, geothermal resources and we aim to become a formidable player in this exciting clean energy space, aiming to deliver 1,000 MW of installed capacity by 2030. The market fundamentals are ripe for major geothermal expansion, which essentially harnesses the earth's natural heat to create energy, in the race to net zero and the push for national energy security,” said Lars Guldstrand, Cindrigo’s CEO.

The purchase price under the option agreement for ECG amounts to GBP 1.62 million, to be paid in cash and stock. The takeover will bring a short-term debt of GBP 1 million related to the existing projects. It will mature on April 30, 2022.

(GBP 1.0 = USD 1.320/EUR 1.195)

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