Located in Nevada, McGinness Hills phase 3 is a 48MW geothermal power plant, which has been operating since late 2018
Image: Ormat divests membership interests in the McGinness Hills phase 3 plant in Nevada to an undisclosed buyer. Photo: courtesy of WikiImages/Pixabay.
A subsidiary of Ormat Technologies has sold membership interests in its 48MW McGinness Hills phase 3 geothermal power plant in Nevada, US, to a private investor, in a deal worth up to $68.3m (£56.32m).
Located in Lander County, the McGinness Hills Phase 3 geothermal plant has been operational since 15 December 2018.
McGinness Hills Phase 3 plant is backed by a 26-year PPA
Electricity generated by the geothermal power plant is sold to Southern California Public Power Authority (SCPPA) under the 26-year Ormat Northern Nevada Geothermal Portfolio Power Purchase Agreement, which was signed in June 2017.
As per the transaction terms, the undisclosed private investor will pay the Ormat subsidiary an initial amount of $59.3m (£48.9m) followed by additional yearly installments of around $9m (£7.42m).
Ormat Technologies CEO Isaac Angel said: “Ormat continues to deploy creative financing structures to augment our low cost of growth capital, including the OPC transaction in 2011, the ORTP transaction in 2013, the OPAL transaction in 2016, the Tungsten Mountain transaction last year and now the current transaction relating to the McGinness Hills Phase 3.
“This transaction allows us to efficiently utilize tax incentives available to geothermal projects and create value for our shareholders.”
Ormat Technologies will continue to provide operations and maintenance of the McGinness Hills Phase 3 geothermal plant. The private investor will receive significantly all of the tax attributes, while the Nevada-based geothermal company will get substantially all of the distributable cash flow generated by the geothermal power plant.
Recently, the renewable energy company commissioned its first-ever geothermal and solar hybrid project through the 7MW solar expansion of its Tungsten Mountain geothermal project located in Churchill County, Nevada.
Last month, Ormat Technologies acquired a 49% stake in the Ijen geothermal project company, which holds the geothermal license to develop the 100MW Ijen geothermal power project in East Java, Indonesia.