UPDATE: Glitnir Eyes $40 Billion For Geothermal Financing

NEW YORK (Dow Jones) — Glitnir said Wednesday it’s planning to invest up to $ 40 billion in geothermal energy projects in North America by 2025 as the Nordic financial group eyes growth in the business of harnessing heat from the earth to produce electricity.

Taking aim at a competitive financing market for alternative energy deals, Glitnir will attempt to outflank the likes of Credit Suisse (CS) , General Electric (GE) , Siemens (SI) and others by focusing on geothermal.

“There’s competition on all angles...the challenges are numerous, but the opportunities huge,” said Arni Magnusson, managing director of sustainable energy for Glitnir.

“We haven’t seen any big banks with a singular interest as we have. We’ve decided to narrow our focus down to geothermal and the U.S. market is on top of the list.”

The firm is readying a formal announcement of a financing deal of more than $ 10 million behind Iceland America Energy Inc., a geothermal specialist with a deal to provide energy to PG&E (PGE) through the Truckhaven project in California, Magnusson said.

Other recent deals include a $19 million financing of Western GeoPower Corp. (TSX.V:WGP), a $23 million financing round for ThermaSource in Santa Rosa, Calif. and a $20 million debt round to help Nevada Geothermal Power Inc. conduct drilling operations.

Glitnir projects an annual U.S. geothermal electricity market of $11 billion by 2025 from about $1.8 billion now, with geothermal potentially providing up to 20% of California’s electricity needs, 60% of Nevada’s and 30% of Hawaii’s.

Magnusson acknowledged that the permitting process in the U.S. for a geothermal plant can take as long as  10 years, but said politicians are now more receptive to speeding up the process as part of an overall push to combat global warming and reduce dependence on foreign oil.

Represented through the Geothermal Energy Association, the industry hopes to preserve production tax credits as it gains footing after a decline in the late 1980s.

Glitnir hung out its shingle in the U.S. by opening a branch office in New York City and sponsoring its first Steam of Opportunities conference at the Palace Hotel.

By tapping into heat from the earth’s crust, geothermal power plans emit 35 times less carbon dioxide per kilowatt produced than the average U.S. coal- fueled power plant, Glitnir said.

The Iceland and Norway-based firm plans to position itself as a development partner through equity raising, merger-and-acquisition advising, debt financing, and business origination for clients and investors.

Glitnir – United States Geothermal Energy – Market Report- September 2007