U.S. Geothermal and Enbridge may partner again
LOS ANGELES (Reuters) - U.S. Geothermal Inc is in talks with Canada's Enbridge Inc about a second equity investment in one of the company's geothermal power plants, Chief Executive Dan Kunz said in an interview.
Enbridge, Canada's No. 2 pipeline company, is beefing up its renewable power business and last year paid $23.8 million for a 20 percent stake in U.S. Geothermal's Neal Hot Springs project in Oregon.
"That was a very good fit with them and now we are working on our second project to see if there is a similar arrangement we can do," Kunz said on Friday.
The two companies are in discussions about Enbridge taking a stake in U.S. Geothermal's San Emidio, Nevada power plant. The company needs about $9 million or $10 million to complete the funding for that plant, Kunz said.
U.S. Geothermal, based in Boise, Idaho, expects to have its Neal Hot Springs plant up and running by the fourth quarter of 2012, Kunz said. The first phase of its San Emidio project will come online later this year, with the second phase coming online in the first quarter of 2013.
As a result of those two projects coming online, Kunz said, U.S. Geothermal will achieve a full year of profitability in 2013.
The company has several other plants under development in the United States and Guatemala, but is also looking at acquisitions, potentially this year, of smaller players that may be having difficulty obtaining the capital they need to grow.
"They develop some resources and then they reach a point where they have to execute on construction and engineering, and little companies like that have difficulties accessing low-cost capital and it makes sense to consolidate," Kunz said.
U.S. Geothermal shares were up 11 cents, or 9 percent, at $1.32 in afternoon trade on NYSE Amex.
(Editing by Steve Orlofsky)