Ormat Technologies Expands Geothermal Power Capacity with $271 Million Acquisition

In a strategic move aimed at boosting their geothermal power production capacity by 70% before 2025, Ormat Technologies, under the leadership of CEO Doron Belsher, has accelerated its expansion plans. The company has announced a significant acquisition from Enel Green Power North America, encompassing a diverse portfolio of energy assets totaling 43 megawatts. This expansion plan, contingent upon regulatory approvals, is set to play a pivotal role in Ormat's ambitious growth strategy.

The acquired assets comprise two geothermal power plants located in Utah and Nevada, alongside a groundbreaking hybrid facility. The hybrid plant, an innovative blend of geothermal, photovoltaic, and thermosolar technologies, has a total capacity of 43 megawatts. In addition, the acquisition includes two solar power plants situated in Nevada and Connecticut, collectively boasting a capacity of 40 megawatts, and earmarked assets for future development.

Ormat Technologies intends to finance the majority of this $271 million purchase through the issuance of long-term bonds. The acquired assets have a solid financial foundation, with a combined annual income of $35 million and an impressive operating profit flow (Ebitda) of $24 million.

To optimize the newly acquired assets, Ormat plans to implement an extensive upgrade program. This includes the enhancement of two geothermal plants, Cove Fort in Utah and Salt Wells in Nevada, both of which have long-term electricity sales contracts. The StillWater hybrid power plant in Nevada is also slated for modernization with cutting-edge equipment developed by Ormat. This upgrade project, anticipated to take between 12 to 24 months and costing $55 million, is expected to increase production capacity by 17 megawatts, resulting in an additional operating profit flow of $15 million.

Ormat's growth strategy extends beyond the immediate acquisition and upgrade plans. The company aims to further bolster the Cove Fort geothermal power plant's production capacity by an additional 20 megawatts over the next five years, pending the acquisition of the necessary permits.

CEO Doron Belsher sees this acquisition as a significant milestone for Ormat Technologies, underscoring its commitment to expanding production capacity and unlocking growth potential. Notably, the acquisition was made at an activity value to operating profit flows (Ev/Ebitda) multiple of 8, factoring in the upgrade plans for the assets. This strategic move is expected to support both the company's short-term and long-term growth objectives. Ormat Technologies is positioning itself as a key player in the geothermal power sector, ready to meet the growing demand for sustainable and efficient energy solutions.