Japanese financial service group ORIX has agreed to buy a 22.1% stake in Israeli geothermal energy producer Ormat Technologies for $627m.

The seller of the stake is a consortium featuring FIMI ENRG Limited Partnership, FIMI ENRG, Bronicki Investments and senior members of Ormat management.

As per the terms, ORIX will be paying them $57 per share at the time of closing of deal which is subject to regulatory approvals among other customary conditions.

Ormat chairman Gillon Beck said: "With ORIX's significant presence around the world, access to capital and strong positioning throughout Asia, we believe Ormat can enhance and accelerate its strategic growth plans in the renewable energy market. We expect this collaboration will expand the number and quality of growth opportunities that Ormat enjoys around the world, particularly in Asia."

Under a new commercial cooperation agreement between ORIX and Ormat, the latter will hold exclusive rights to develop, own, operate and provide equipment for the Japanese company’s geothermal energy projects in all markets with the exception of Japan.

Apart from that, the Israeli company will hold certain rights to play the role of a technical partner besides jointly investing in the geothermal energy projects of ORIX in Japan.

Ormat will also be assisted by ORIX in securing project funding for its geothermal energy plants from renewable energy debt financers associated with the Japanese firm in Asia and rest of the world.

ORIX Energy and Eco Services Business Headquarters head Yuichi Nishigori said: “As one of Asia’s leading investors in the renewable energy sector, and with a growing portfolio of renewable energy investments around the world, we recognize the importance of having clean, reliable, baseload power such as that which geothermal provides, and we believe that the geothermal sector has the potential to become an increasingly large component of the world’s overall energy mix.”

The transaction is expected to be completed during the third quarter.

In March, Ormat had completed a previously announced acquisition of Philadelphia-based smart grid company, Viridity Energy.