Under the transaction documents, the investor acquired membership interests in the project for an initial purchase price of approximately US$59.3 million and for which it will pay additional annual instalments that are expected to amount to a total of approximately US$9 million.
Ormat will continue to operate and maintain the power plant and will receive substantially all of the distributable cash flow generated by the power plant, and the private investor will receive substantially all of the tax attributes.
"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," said Isaac Angel, Ormat CEO. "This transaction allows us to efficiently utilise tax incentives available to geothermal projects and create value for our shareholders."
The McGinness Hills Phase 3 geothermal power plant, located in Lander County, Nevada, began commercial operation in December 2018. The project sells its power under the 26-year Ormat Northern Nevada Geothermal Portfolio Power Purchase Agreement with Southern California Public Power Authority, which was announced in June 2017.