Ormat inks deal on geothermal plant purchase in Guadeloupe

Ormat Technologies Inc (NYSE:ORA) has signed a deal to take control of the firm that owns and operates the Bouillante geothermal power facility in Guadeloupe Island, with plants to expand the plant’s capacity to 45 MW from the current 10 MW by 2021.

After signing a memorandum of understanding (MoU) regarding the planned transaction in December, Ormat has now inked a final deal to acquire, gradually, an 85% stake in Geothermie Bouillante SA for a total of EUR 32 million (USD 35.6m).

Initially, Ormat will buy a 79.6% stake in the firm for about EUR 22 million and will get the right to lift its interest to 85% through an additional investment of EUR 10 million that could be made over the following two years. The initial transaction is expected to close in the second quarter of the year.

The US company 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.

Subject to the achievement of certain production thresholds and the capacity expansion, the vendor, Sageos Holding, could receive up to an additional EUR 16 million as part of the transaction.

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 1.110)

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