The company said it will gradually purchase 85 percent of Geothermie Bouillante SA (GB) for approximately $56 million. GB owns and operates a 14.75 MW geothermal power plant and owns two exploration licenses with a total additional potential capacity of up to 30 MW, all located in Guadeloupe Island.
Ormat signed a memorandum of understanding (MOU) with Sageos Holding, a subsidiary of Bureau de Recherches Géologiques et Minières (BRGM), the French geological survey. GB is a subsidiary of Sageos. Upon closing, Ormat will hold approximately 80 percent of GB, which will be increased to 85 percent within two years by capital investment agreed upon in the MOU, the company said.
“This acquisition represents another milestone in the execution of our strategic plan to expand our global footprint and enhance our portfolio through targeted M&A activity,” Isaac Angel, CEO of Ormat, said in a Dec. 7 statement. “This transaction is a strategic fit for Ormat, as it will enable us to leverage our technology, engineering, procurement and construction capabilities and our geothermal expertise to add value to the assets we acquire as well as to Ormat shareholders. We plan to continue our proactive search for acquisition opportunities worldwide.”
Ormat expects to close the transaction by May 2016.
GB has two power purchase agreements (PPAs) with Électricité de France S.A. (EDF), the French electric utility. Ormat said that a new 15-year PPA with EDF with improved energy rates will become active on Jan. 1, 2016, and replace the current PPAs.
Ormat said it plans to optimize the use of the resource at the GB plant and recover its current approximate production of 10 MW to its designed production of 14.75 MW by mid-2017. In addition, Ormat plans to modify 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.
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