The transaction includes Enel's entire geothermal portfolio in the US along with various small solar plants
The Salt Wells geothermal power plant is part of the portfolio being sold by Enel to Ormat. (Credit: Enel Spa)
Italian energy company Enel, through its wholly-owned subsidiary Enel Green Power North America (EGPNA), has agreed to divest a 150MW geothermal and solar portfolio in the US to Ormat Technologies in a deal worth $271m.
The deal involves Enel’s entire geothermal portfolio in the US along with various small solar plants.
The assets include two contracted operating geothermal power plants, a 43MW triple hybrid facility, two solar assets with a combined nameplate capacity of 40MW, and two greenfield development assets.
The contracted geothermal power plants are Cove Fort in Beaver County, Utah and Salt Wells in Churchill County, Nevada.
The solar PV facilities are Stillwater Solar PV II located in Churchill County, Nevada and Woods Hill Solar PV Park in Windham County Connecticut.
For Enel, the divestiture is aimed at enhancing returns on capital employed to support future development plans, and it also aligns with the company’s goal of progressively streamlining its structure.
Moreover, the agreement is anticipated to have a positive impact on Enel’s consolidated net debt, increasing it by approximately €255m. It will also simultaneously cause a negative effect of roughly €35m on the company’s reported EBITDA.
Ormat Technologies intends to bolster the power plants’ EBITDA by significantly enhancing their operations, profitability, and generation.
Through the acquisition, the company also seeks to advance its electricity growth plans and further strengthen its commitment to sustainable, low carbon footprint energy solutions.
Ormat Technologies CEO Doron Blachar said: “We are confident that this accretive acquisition, which carries approximately an 8x EV/EBITDA multiple (inclusive of the future planned enhancement and optimisation but excluding the Cove Fort expansion), will support both our short and long-term growth plans, further leveraging our unique core capabilities to maximise the efficiency and output from these power plants’ energy sources, strengthening our financial position, and delivering meaningful value to our investors.”
Subject to regulatory approvals and customary conditions, the transaction is anticipated to be completed by Q1 2024.