Update on Paraguay Operations

ATOME Energy PLC

31 October 2023

 

31 October 2023

ATOME ENERGY PLC

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

Update on Paraguay Operations

ATOME Energy (AIM: ATOM), the only international green fertiliser project development company on the London Stock Exchange, which is progressing large-scale projects of 445MW in Paraguay provides an update on progress on its current major projects.

Summary:

• Front-end engineering design ("FEED") for the Villeta Project, Paraguay nearing completion with engineering, procurement and construction ("EPC") discussions at advanced stage
• Environmental licence granted - tax-free zone status expected shortly
• The Board is increasingly confident that the debt financing component of the project can be achieved
• Significant carbon credit potential from the Villeta Project following independent estimates of up to 550,000 tons of CO2eq displaced per year with new Paraguay law expected to support monetisation of carbon credits
• 300MW Yguazu Project progresses

Villeta 145 MW Phase I Villeta Project

ATOME is pleased to report the continued progress is being made in relation to this project:

FEED and EPC nearing completion

The FEED study is nearing completion, and advanced discussions and negotiations are currently ongoing in relation to the EPC contract with the main and specialist sub-contractors, led on ATOME's behalf by the Owner's Engineer, AECOM, the international engineering consultancy. Completion of the EPC contract is a prerequisite for taking final investment decision ("FID").

Environmental license granted and tax-free zone approved

On the ground, following a thorough process, the Environmental Licence has now been granted to ATOME by Paraguay's Ministry of Environment and Sustainable Development. This is a key project document which gives ATOME the rights to commence preparation and clearance of the Villeta site and enables all necessary permitting from construction to operation of the production facility.

In addition, the grant of the tax-free zone has passed through all the necessary inter-governmental processes and awaits only signing off by Presidential decree which is expected shortly. All of this has been achieved with the support of the Government whose backing for this project has been key. Tax free zone status will provide significant financial benefits to the project and its funders.

Phase I Villeta debt financing has seen a strong level of interest

In respect of debt financing, significant expressions of interest have already been received from both Development Finance Institutions and international banks. Whilst work continues in relation to this, the strong level of interest shown to date has demonstrated the financeability of the Company's first industrial scale green fertiliser project and the Board is increasingly confident that the required debt financing component can be achieved.

It is worth repeating that the debt financing discussed is at the project level which would provide significant value to ATOME shareholders. We will provide further updates to shareholders on the timing of all aspects of the project financing.

Sustainability credentials bring significant Carbon Credits opportunity

Further to the Company's August announcement of its preliminary carbon footprint analysis of its CAN product, ATOME can confirm that the Company's estimates have been independently reviewed by the specialist sustainability division of its Owner's Engineer AECOM, which has assessed that ATOME's green calcium ammonium nitrate ("CAN") fertiliser is estimated to have a significantly lower carbon footprint than current grey alternatives, potentially displacing up to 550,000 tons of CO2eq per year versus an imported and applied grey CAN fertiliser in the Paraguay market.

This provides ATOME with a potentially significant value-added part of the business in respect of any sale of these credits. The future value of any projected offsets has also now been potentially significantly increased by the new carbon credit law in Paraguay enacted this month under which there is a Government backed verification and certification procedure for qualifying credits to make them more acceptable in the global carbon market.

300MW project in Paraguay code named Yguazu

The Yguazu project is over twice the size of the world-scale Villeta facility and, after discussions with state energy provider ANDE, studies are being embarked upon to identify the best place to locate the Yguazu facility.

With the FEED study on Villeta now available to the Company, lessons learned from Phase I, together with ATOME's own infrastructure and professional teams, means that the Company will be in a position to expedite this major project and others when the time comes. Both contractors and funders are aware that participation in Phase I Villeta will confer early mover advantage for the next major project.

Olivier Mussat, CEO, commented: "One by one, milestones continue to be achieved by ATOME as our flagship world-scale green fertiliser project at Villeta, Paraguay proceeds.

"The critical environmental licence has been obtained, a mandatory step in the project development, opening the door to move to site clearance as the first step of operations, with the additional benefit of enabling the formal decree for tax-free zone status to be granted in the near future.

"The level and nature of the significant interest in the debt component of the Villeta project finance is very encouraging, demonstrating international as well as local financing interest in our project which has both strong economic viability as well as clear development impact thanks to its green credentials.

"It is an increasingly busy time for ATOME and we will continue to keep shareholders appraised of our progress."

Glossary

FEED means front-end engineering design

EPC means engineering, procurement, and construction

FID means final investment decision

Owner's Engineer meaning the independent technical and engineering representative for the project owner

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

ATOME Energy PLC Nikita Levine, Investor Relations	[phone] [e-mail]
Beaumont Cornish (Nominated Adviser) Roland Cornish, Michael Cornish	[phone]
Liberum (Joint Broker) Scott Mathieson, Kane Collings	[phone]
SP Angel (Joint Broker) Richard Hail, Harry Davies-Ball	[phone]
Cavendish Capital Markets Limited (Broker) Simon Hicks, George Dollemore	[phone]
Tavistock (Financial PR and IR) Simon Hudson, Rebecca Hislaire, Charles Baister	[phone] [e-mail]

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 fertiliser production with 445-megawatt of projects in Paraguay and a further pipeline of potential projects in Central America and Iceland.

Since its admission to AIM in December 2021 ATOME signed a 145MW 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 Banking and the multilateral IDB Invest to lead the project funding and with Front End Engineering and Design studies currently underway with the international companies Urbas and Casale. ANDE has also allocated a further 300MW for ATOME's second project subject to studies.   

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 produce green ammonia at an industrial scale using 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 since May 2023, Baker Hughes, a global energy technology company operating in the energy and industry sectors.

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