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Mighty River Power, GeoGlobal Terminate Geothermal Venture

Feb. 15 (Bloomberg) -- Mighty River Power Ltd., a state-owned power utility in New Zealand, agreed to terminate a five-year-old geothermal energy investment venture with closely held GeoGlobal Energy LLC.

The companies are breaking up their GGE Fund, which is managed by GeoGlobal and financed primarily by Mighty River, the Auckland-based utility said yesterday in a statement. It will pay GeoGlobal, based in Chevy Chase, Maryland, $24.8 million when the deal is completed.

Mighty River will take control of the fund’s minority interest in U.S. geothermal developer EnergySource LLC as well as a Chilean business unit and development-stage projects in that country. GeoGlobal will retain the fund’s assets in Germany and those in the U.S. not owned by EnergySource, according to the statement.

“We see a lot of potential synergies between our business and EnergySource as an operator and developer of a large brownfield geothermal reservoir in the U.S.,” Mighty River Chief Executive Officer Doug Heffernan said in the statement.

Closely-held EnergySource, which is owned by investment company Hannon Armstrong Capital LLC and renewable energy developer Catalyst Renewables Corp., said in 2010 that GeoGlobal bought a 20 percent stake in the company. It has completed one U.S. project, in the Salton Sea area of southern California.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

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

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