Japanese investment bank ORIX Corporation has taken a foothold in a US-based geothermal developer with the purchase of a 22.1 percent stake in Ormat Technologies for $627 million.
ORIX agreed to buy 11 million shares of Ormat common stock from buyout firm FIMI ENRG, family office Bronicki Investments and senior members of Ormat’s management for $57 per share. The Japanese conglomerate gains a substantial minority stake in a company that has developed over 2.2GW of geothermal capacity in the US, Latin America and Africa.
The deal was billed as a way for Ormat and ORIX to work closer together on future geothermal projects. Ormat now has exclusive rights to develop, own and operate ORIX geothermal projects in all markets outside Japan and can also co-invest alongside the firm for projects in Japan. ORIX will help Ormat obtain project financing for its own geothermal projects from renewable energy debt providers in Asia and globally.
“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,” Ormat chairman Gillon Beck said.
As part of the deal, ORIX will appoint three people to an expanded nine-person Ormat board of directors.
In April, ORIX’s US-based subsidiary established a development partnership with IGS Solar to build and own a portfolio of distributed solar projects for commercial and industrial customers throughout the US.