Ormat closes buy of 60% in Guadeloupe geothermal co

Ormat Technologies Inc (NYSE:ORA) said on Tuesday it has completed the purchase of a 60% stake in the firm that owns and operates the Bouillante geothermal power facility in Guadeloupe Island.

Ormat bought the controlling stake in Geothermie Bouillante SA (GB) for EUR 16.7 million (USD 18.5m) in a transaction that also saw French state-owned financial organisation Caisse des Depots et Consignations (CDC) acquire a 20% interest in the same firm.

The US geothermal company has pledged to pay an additional EUR 7.5 million to the vendor, Sageos Holding, and thus increase its interest in GB to 63.75% in the next two years. The plan is for Ormat and CDC to gradually grow their combined shareholding in the company to 85%.

Ormat noted it will use its technology and expertise to optimise the existing equipment at the plant and recover its current production to its design capacity of 14.75 MW by mid-2017. Moreover, Geothermie Bouillante owns two licences with a total additional potential capacity of up to 30 MW, all located in this French territory in the Caribbean. Ormat intends to use those to reach a total production capacity of 45 MW by 2021, it said.

Under an investment deal, Ormat will pay Sageos up to EUR 12 million if certain production thresholds and capacity expansion are achieved within a defined time period.

The Bouillante geothermal plant sells its output under a 15-year power purchase agreement (PPA) with French electric utility EDF SA.

(EUR 1.0 = USD 1.106)

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