Ormat Finalizes $46.7M ITC Transfer for California BESS

• Ormat Technologies secures $46.7 million from tax credit transfers, fueling expansion in sustainable energy. Discover how this strategic move enhances their financial outlook and growth potential!

Ormat Technologies Inc. has completed the transfer of investment tax credits (ITCs) for its 80-MW/320-MWh Bottleneck battery energy storage system (BESS) in California, securing net proceeds of $46.7 million from an unnamed third-party investor. This transaction aligns with Ormat's strategy to generate up to $152 million in cash tax benefits in 2023, enabling further reinvestment in sustainable energy solutions.

The funds from this deal, along with $14 million from a recent production tax credit (PTC) monetization, will bolster Ormat's balance sheet and support capital expenditure growth. CEO Doron Blachar highlighted the importance of the ITC transfer as a pivotal step in funding the company's long-term growth objectives. The Bottleneck battery, operational since October, is Ormat's largest energy storage facility located in California's Central Valley.

How will Ormat's ITC transfer impact its growth and sustainability initiatives?

Impact of Ormat's ITC Transfer on Growth and Sustainability Initiatives

• Enhanced Financial Liquidity: The successful transfer of ITCs, which brought in $46.7 million, provides Ormat with additional financial resources. This enhanced liquidity will allow the company to pursue both new and ongoing renewable energy projects, directly supporting its growth strategy.
• Investment in New Technologies: With the substantial funds acquired from the ITC transfer, Ormat can invest in advanced technologies and research for energy storage and geothermal solutions, promoting innovation in renewable energy systems and enhancing sustainability practices.
• Strengthening Project Pipeline: The cash generated from ITCs and PTCs enables Ormat to expand its project pipeline. This investment can facilitate the development of more energy storage and geothermal projects, aligning with the growing demand for renewable energy solutions.
• Support for Sustainable Initiatives: The funding allows for reinvestment in sustainability initiatives, such as community engagement projects, environmental conservation efforts, and educational programs aimed at promoting renewable energy practices.
• Reduced Dependence on External Financing: By monetizing tax credits, Ormat decreases its reliance on traditional debt financing. This strategic move positions the company to navigate market uncertainties while maintaining focus on sustainable energy initiatives.
• Increased Competitive Advantage: The capital influx positions Ormat favorably against competitors in the renewable energy sector, enabling the company to escalate its capabilities in energy storage and geothermal applications, ultimately leading to market expansion.
• Job Creation: The financial support from ITC transfers is likely to result in increased employment opportunities in the renewable energy sector, particularly in project development, engineering, and operations of new sustainable initiatives, contributing to local economies.
• Contribution to Climate Goals: By enhancing its capabilities in energy storage through the Bottleneck facility, Ormat contributes significantly to energy reliability and sustainability in California, supporting state and national climate targets aimed at reducing carbon emissions.
• Long-term Financial Stability: The realization of up to $152 million in cash tax benefits in 2023 is poised to stabilize Ormat's financial footing long-term, allowing for sustained growth and strategic investment in renewable infrastructures.
• Increased Stakeholder Confidence: Successfully managing the ITC transfer can boost investor and stakeholder confidence in Ormat's ability to effectively leverage tax incentives, which may lead to more support and collaboration from potential partners in future projects.