Utah, United States [RenewableEnergyWorld.com] Raser Technologies Inc. has reached an agreement with Evergreen Clean Energy LLC for the financing of geothermal well field development. The developments could be used for up to 100 megawatts (MW) of geothermal power projects. Under terms of the non-exclusive agreement, Evergreen is expected to provide approximately US $30 million in financing for each power project funded, with final amounts for each project based on the expected capacity of the project.
For the typical 20 MW project, Raser and Evergreen expect the financing commitment to be approximately $25 million to fund drilling and another $5 million paid to Raser in exchange for Evergreen’s participation rights in the project.
In return for its investment, Evergreen will receive an equity interest of approximately 50% in each power project and will receive a 15% preferred return on the capital invested. The agreement also provides that Evergreen will receive warrants to purchase shares of Raser’s common stock in connection with the funding of each power plant project. The total amount of warrants to be issued will be dependent upon the amount of funding provided.
Raser expects to initially seek funding under the agreement to develop the Lightning Dock, New Mexico and Thermo, Utah resources, which collectively have the potential to support up to approximately 250 MW of power generation.
Earlier this week, Raser announced that it had reached a deal with finance partners for its Thermo No. 1 project in Utah.
To hear more about the struggles geothermal energy developers face when it comes to financing, listen to, Geothermal: It’s Not Just About Drilling Holes, part of our Inside Renewable Energy podcast.