Four North American geothermal companies announced plans to merge on Wednesday and raise C$100 million ($90 million) to develop key projects to produce clean power.

Polaris Geothermal Inc, Western GeoPower Corp, GTO Resources Inc and Ram Power, a private geothermal power developer, said they have entered into a letter of intent to combine their businesses into larger, more liquid geothermal company.

Geothermal energy comes from hot water and steam produced deep below the Earth's surface. They are piped up to the surface and used to drive turbines to generate electricity.

The new company would be a growth-focused geothermal power company with a diversified project portfolio spanning all development stages from exploration to production, the companies said in a statement.

GTO intends to raise about C$100 million in a private placement that will give purchasers shares in the combined company.

Subscription receipts will be offered at an anticipated price of C$3 per GTO share, after a 10-for-one share consolidation.

Wednesday's announcement comes some two weeks after an announcement from GTO that it plans to buy Ram Power.