RENO, Nev., March 14, 2016 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) announced today it has signed an Investment Agreement and Shareholders Agreement with Sageos holding (Sageos), a fully owned subsidiary of Bureau de Recherches Géologiques et Minières (BRGM), the French governmental geological survey company, to acquire, gradually, 85% of Geothermie Bouillante SA (“GB”). GB owns and operates the Bouillante geothermal power plant. This plant currently generates approximately 10 MW, and owns two exploration licenses with a total additional potential capacity of up to 30 MW, all located in Guadeloupe Island, a French territory in the Caribbean.
At closing, expected in the second quarter, Ormat will pay approximately €22 million (approximately $24 million, based on current foreign currency exchange rates) to Sageos for 79.6% equity interest in GB. In addition, Ormat is committed to further invest €10 million during the first two years, which will increase its equity interest to 85%. The cash will be used mainly for the enhancement of the power plant.
Ormat is confident that with its technology and expertise it can optimize the use of the resource at the existing facilities and recover its current production to its design capacity of 14.75 MW by mid-2017. Additionally, Ormat plans modifications to the existing equipment as well as to further develop the asset, with a potential of reaching a total of 45 MW in phased development, by 2021. Under the Investment Agreement, Ormat will pay Sageos an additional amount of up to €16 million subject to the achievement of agreed production thresholds and capacity expansion within a defined time period.
“Strategic M&A is a key pillar of our growth strategy, enabling us to leverage our expertise and our balanced model to improve existing projects, expand our geographic reach and grow our portfolio,” noted Isaac Angel, Chief Executive Officer. “This acquisition is an evidence to the progress we made in our business development efforts to achieve these important goals. We are happy to have the opportunity to share our accumulated knowledge and experience in the geothermal development in Guadeloupe Island. I’m certain that, together with the local skilled employees and our partner BRGM, we can achieve great accomplishments and add value to the assets we acquire as well as to Ormat shareholders.”
The Bouillante geothermal plant sells its electricity under a new 15-year Power Purchase Agreement (PPA) that was entered into force in January 2016, with Électricité de France S.A. (EDF) the French electric utility. As a major renewable plant in Guadeloupe Island, the power plant is entitled to certain benefits from the French government that were set in order to promote renewable energy, mainly through feed-in tariff and tax benefits.
About Ormat Technologies
With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. The company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter - a power generation unit that converts low-, medium- and high-temperature heat into electricity. With 72 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 450 employees in the United States and over 600 overseas. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 2,000 MW of gross capacity. Ormat’s current 697 MW generating portfolio is spread globally in the U.S., Guatemala and Kenya.
Ormat’s Safe Harbor Statement
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2016.
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
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