Ocean Thermal Talking to African, Caribbean Utilities About Plants

Ocean Thermal Energy Corp., a U.S. developer of clean-energy technology, is talking to utilities in East Africa and the Caribbean on building plants to generate power using differences in sea temperatures.

The company would need to raise funds for the projects on top of the money already in place for two 10-megawatt so-called ocean-thermal energy plants it agreed to build for the Bahamas Electricity Corp. on Sept. 22, Chairman Jeremy Feakins said. It’s also studying an initial public offering within two years.

The Bahamas units, which will produce power and drinking water, will cost about $100 million each, 75 percent funded with bank debt, according to Feakins, also chief executive officer.

“The banks providing debt for the Bahamas projects are interested to help on the debt side but they won’t put up any equity,” he said. Ocean Thermal aims to design, build, own and operate projects after signing customers up to 25-year or 30- year agreements to buy the electricity and water produced.

“We have looked at the Alternative Investment Market and we are interested in it and have had discussions,” Feakins said. “It’s a great market for us because the U.K. and Europe are very sympathetic towards renewable energy companies.” The company is also studying an IPO in Canada for the same reason.

Building a plant takes 18 months to 2 years, using off-the- shelf parts from the oil and gas industry to cut risks from new technology and put financial backers at ease, Feakins said.

The company is introducing its operations in areas where power is typically costlier to produce than in the U.S., helping to counter the current expense of its technology, he said.

“The Bahamas and Cayman islands and a lot of other Caribbean countries are paying about 40 cents a kilowatt-hour for their electricity, which is huge compared to the U.S., for example, which is 11 to 12 cents a kilowatt-hour,” he said.

Ocean-thermal power plants need warm water, limiting projects to the Pacific region within 20 degrees of the equator, Feakins said. These areas also need fresh water, he said.

To contact the reporter responsible for this story: Louise Downing in London at Ldowning4@bloomberg.net

To contact the editor responsible for this story: Reed Landberg in London at landberg@bloomberg.net