RAME ENERGY PLC Rame Energy / Index: AIM / Epic: RAME / ISIN: JE00BBD8GG53 / Sector: Energy
24 March 2015
Rame Energy plc ("Rame" or the "Company")
Expansion of Santander Agreement and sale of Punta Chome Project
Rame, the independent power producer, is pleased to announce that it has increased the capacity of its Chilean wind projects that are to be developed as part of the US$69 million framework agreement with Santander Investment Chile Limitada ("Santander"), by a net 15MW to 133MW. The Board has made this decision having confirmed that cost efficiencies and improved economics are achievable by developing a new 24 MW wind project in conjunction with one of the framework's existing projects which is in close proximity.
The combined total of approximately 54MW for the expanded project is planned to enter construction in Q4 of this year. The framework agreement with Santander now totals 133MW and the target remains to have this capacity installed by the end of 2016 subject to finance. This follows the successful mechanical completion of the 15MW Raki / Huajache project announced on 9 March 2015 which was co-financed with Santander separately to the framework agreement.
Given the efficiencies outlined above, the 9MW Punta Chome project will no longer be considered for investment under the agreement with Santander. As a result, the Company is pleased to announce that it has executed binding terms with a leading European renewable developer, EREN Développement ("EREN"). The agreement covers the sale, pre-construction permit finalisation, on-site construction enabling works and other project services to assist EREN in the complete implementation of the project and is worth up to $2M between now and project completion, estimated to be in Q2 of 2016. Rame retains an option to participate in up to 20% of the project's equity.
Rame CEO Tim Adams said "The introduction of a new project under the framework agreement with Santander increases the overall MW target and its consolidated returns. It is also testament to our ongoing relationship with Santander and the expanded 54MW project will be fast-tracked to construction by the end of 2016. The decision not to proceed with the Punta Chome project emphasises the ability of the partners to make effective changes to the strategy and to respond to emerging opportunities in this very dynamic market.
"Moreover, we are delighted to have agreed terms with EREN for the Punta Chome project which recognise the value of Rame's underlying project assets and project management skills and that will see the project progress quickly towards construction. I look forward to building on our relationship with EREN and demonstrating the opportunity to realise real value from our pipeline and capabilities with both our partners in addition to growing our presence as an IPP. "
**ENDS**
Enquiries
Rame Energy plc | Tel: +44 (0) 1752 565638 |
Tim Adams (Chief Executive) | |
Kevin McNair (Chief Financial Officer) | |
Northland Capital Partners Limited | Tel: +44 (0) 20 7382 1100 |
Nominated Adviser and Broker | |
Matthew Johnson / Gerry Beaney (Corporate Finance) | |
John Howes (Corporate Broking) | |
St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Elisabeth Cowell / Frank Buhagiar |
For more information visitwww.rame-energy.com
About Rame Energy plc
Rame is an established revenue generative global supplier of cost effective, technically optimised and reliable power generation solutions including wind, solar and diesel to blue chip clients such as Akzo Nobel, Anglo American, Barrick Gold and Codelco. The Company has executed its first joint venture agreement with Santander Investment Chile Limitada to co-finance its Raki and Huajache projects. These two projects, in which Rame has a 20% equity participation, will have 15MW of generating capacity and have now been mechanically completed. The debt package for the two projects is being provided by Chilean bank, Banco BICE.
Rame aims to become a niche Independent Power Producer ("IPP") targeting an operational portfolio of 300MW in Latin America within three years. The Company plans to build on its proven track record of delivering power in South America where it has been involved for more than a decade.
About EREN Renewable Energy
EREN Développement is focused on developing power projects in countries where renewable energy represents an economically viable response to growing energy demands. Through organic growth as well as partnerships established with local developers, Eren has accumulated a portfolio of over 450 MW (gross) of renewable energy assets in operation or under construction, and over 1,500 MW of assets under development in less than three years. Eren RE is a subsidiary of EREN, the first group dedicated to natural resource efficiency, founded by Pâris Mouratoglou and David Corchia.
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