REG - ATOME Energy PLC - Significant Progress in Paraguay

AtomeAnnouncement

19/07/2023 07:00

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RNS Number : 4269G  ATOME Energy PLC  19 July 2023

19 July 2023

 

ATOME ENERGY PLC

("ATOME", "the Company", or "the Group")

 

Significant further progress

 

Extension of Villeta PPA to 145MW

 

300MW pre-PPA signed for Yguazu Project

 

ATOME (AIM: ATOM), the only international green hydrogen, ammonia, and
fertiliser project development company on the London Stock Exchange, with
current large-scale projects in Latin America and Europe, as well as hydrogen
mobility projects, announces an update on its Paraguay operations.

 

Highlights:

·     Increase of 120-megawatt ("MW") power purchase agreement ("PPA") at
Phase I Villeta Project to 145MW

·     Entry into 300MW pre-PPA agreement for Phase II Yguazu Project with
commencement of necessary studies

·   Approval of ATOME's application for tax-free zone status at Villeta
Project conditional on completion of environmental studies

·     Multiple expressions of interest from leading international players
for offtake of Phase I Villeta production

·     Final Investment Decision ("FID") for Phase I Villeta expected in
Q4 2023

 

Extension of Phase I Villeta PPA to 145MW

The existing 120MW PPA entered into between ATOME and ANDE, the Paraguayan
National Power Company, has now been increased to a total of 145MW.

 

The enlarged PPA enables ATOME to have ample headroom to be able to deliver
the 120MW Phase I Project on a 24/7 constant baseload basis as well as
providing upside flexibility. The power is immediately available from the
recently built Buey Rodeo substation, less than 300 metres from ATOME's site
in Villeta, Paraguay.

 

The 145MW PPA for ATOME's totally green project is the single largest PPA
granted to any industrial user in the history of Paraguay and demonstrates the
ambition of Paraguay, soon to be led by its new President, Santiago Pena, to
become a global leader in green industries.

300MW Pre-PPA signed for Phase II Yguazu, Paraguay

ATOME and ANDE have entered into a pre-PPA agreement for 300MW of power for
ATOME's Phase II Paraguay Project to be based at Yguazu where there is a newly
built landmark 1-gigawatt substation going through initial testing.

 

As with the Villeta PPA, the 24/7 power is generated by the 14GW Itaipu
Binacional hydroelectric dam, the second largest by output in the world which
Paraguay shares with Brazil.

 

The pre-PPA sets out certain studies required by ANDE to be completed to its
satisfaction prior to entry into the formal PPA. ATOME is now commencing
procurement work for such studies with the objective of completing these
before the end of this year.

Tax-free zone Villeta

In relation to its Phase I Villeta Project, ATOME has applied to the
Government of Paraguay to be granted a tax-free zone at Villeta.

 

The Company can now report that the Inter-Governmental National Council of
Tax-Free Zones has unanimously approved ATOME's application for tax-free zone
status for its Project at Villeta, conditional only on the Environmental and
Social Impact Assessment Study ("ESIA"), currently being completed, being
satisfactory to the Ministry of Environment.

 

The ESIA has been conducted by the well known independent environmental
consultant JGP, following Paraguay and International standards. It has been
part funded by IDB Invest, part of the Inter-American Development Bank
("IDB"), being the largest multilateral source of funding projects in Latin
America and the Caribbean with whom ATOME has signed a mandate with the intent
of IDB Invest becoming a key funding partner in the Project.

 

All factors being equal, and subject always to Government and Presidential
approval, ATOME is targeting to receive certified tax-free zone status by the
end of 2023. Such status brings inter alia the following benefits which will
materially enhance the economics of the Villeta Project:

 

·      Tax-free importation of goods and equipment

·      Exemption of VAT on goods and services

·      Only 0.5% tax on invoice value of exports outside of Paraguay
with no other profits tax

·      3% tax on domestic sales of production within Paraguay

Offtake of Phase I Villeta production

ATOME has received several written expressions of interest from international
players to take all of the Company's Phase I production on a long-term basis.

 

Whilst it is too early to comment further on this with discussions ongoing, it
demonstrates the presence of long-term demand for ATOME's production, targeted
to start by the end of 2025. The Company is confident that interest in and
demand for ATOME's totally green fertiliser marketed under the ATOME "Green-N"
label will grow both domestically in Paraguay and worldwide during the time of
the build-out process to 2025.

 

Final Investment Decision

The work towards FID is progressing as with engineering, procurement, and
construction discussions with contractors.

 

The team of Urbas, Casale, and ATOME's Owner's Engineer AECOM, together with
the Company are all working towards the goal of being ready for FID in Q4
2023. It is the intention that AECOM, the multi-national engineering
consulting and technology company with a US$13.1 billion turnover in 2022 will
become ATOME's project manager for the Villeta Project, managing on ATOME's
behalf the EPC contractors.

 

Further announcements will be made in due course.

Olivier Mussat, CEO, commented:

 

"Major progress continues to be made on all levels of the Company with
significant milestones being achieved. Whilst we recognise that we have set
ourselves a challenging target for FID at the Villeta Project at or around the
end of the year, we are progressing with our technical and funding partners in
a systematic manner in order to achieve that goal.

 

"We look forward to keeping the market informed on a regular basis between now
and then."

 

For more information, please visit https://www.atomeplc.com
(http://www.atomeplc.com/) or contact:

 

 ATOME Energy PLC                                  +44 (0) 113 337 2210

 Nikita Levine, Investor Relations                 info@atomeplc.com (mailto:info@atomeplc.com)
 Beaumont Cornish (Nominated Adviser)              +44 (0) 20 7628 3396

 Roland Cornish, Michael Cornish
 Liberum (Joint Broker)                            +44 (0) 20 3100 2000

 Scott Mathieson, Kane Collings
 SP Angel (Joint Broker)                           +44 (0) 20 3490 0470

 Richard Hail, Harry Davies-Ball
 finnCap (Joint Broker)                            +44 (0) 20 7220 0500

 Christopher Raggett, George Dollemore
 Tavistock (Financial PR and IR)                   +44 (0) 20 7920 3150

 Simon Hudson, Rebecca Hislaire, Charles Baister   atome@tavistock.co.uk (mailto:atome@tavistock.co.uk)

 

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon publication of this announcement, this inside information is
now considered to be in the public domain. The person who arranged for the
release of this announcement on behalf of the Company was Peter Levine,
Chairman.

 

About ATOME

ATOME Energy PLC is an AIM listed company targeting green hydrogen, ammonia,
and fertiliser production with over 500-megawatt of projects in Paraguay,
Iceland, and Central America.

 

Since its admission to AIM in December 2021 ATOME has signed its first
electrolyser purchase order for its hydrogen transport Mobility Division due
to start generating revenue in 2023 and signed a 120MW power purchase
agreement with ANDE, the state energy company in Paraguay for production of
green ammonia to produce industrial scale premium value green fertiliser in
2025. It has procured 30 hectares of land in Villeta, Paraguay for that
facility, mandated Natixis Corporate Investment Bank and the multilateral IDB
Invest to lead the project funding and the FEED study is currently underway
with the international companies Urbas and Casale.

 

In December 2022, ATOME entered into a joint venture with Cavendish, the
renewable energy arm of the substantial and well-established Purdy Group based
in Costa Rica and formed The National Ammonia Corporation S.A, which is owned
equally by ATOME and Cavendish.

ATOME is in the process of operational planning, sourcing and negotiations
with green electricity suppliers, equipment providers and offtake partners,
including signed memoranda of understanding and cooperation agreements in
place with key parties, to use electricity generated from existing geothermal
sources in Iceland and hydroelectric power in Paraguay and Costa Rica. All
chosen sites are located close to the power and water sources and export
facilities to serve significant domestic and then international demand.

 

The Company has a green-focused Board which is supported by major shareholders
including Peter Levine, Trafigura, one of the world's leading commodity and
logistics company, and Schroders, a leading fund manager, and from May 2023,
Baker Hughes, a global energy technology company operating in the energy and
industry sectors.

 

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