Rame Energy, the international energy consultant, engineer and power generator, has announced that it has signed an exclusive framework agreement including indicative terms (the “Terms” or the “Agreement”) with Santander Investment Chile Limitada (“Santander”) for up to US$69m of equity financing for the Company’s next four wind projects in Chile totalling 118 MW. This Agreement formally builds on the Company’s existing cooperation with Santander, which has seen Santander co-finance Rame’s first two wind projects in Chile totalling 15 MW, and is in line with the Company’s strategy to become a leading independent power provider (“IPP”) in the country.
Under the Terms it is proposed that, subject to due diligence and final contracts, Santander would acquire each project for an already agreed price per MW and provide between 80% and 90% of the required equity capital for the project. Rame shall contribute the balance of the equity and Santander shall be responsible for structuring the debt packages.
The Terms envisage that the four projects commence commercial operations by 31st December 2015 at the latest. As part of the Agreement, the Company has a Call Option Right to acquire Santander’s equity upon commencement of the commercial operations, based on an already agreed formula. In addition, Rame will be contracted by Santander to oversee the construction of all four projects. The Terms also specify that Santander should be considered first for the equity financing of future projects developed by Rame up until 31 December 2016.
Tim Adams, Rame CEO, commented: “This framework agreement with Santander for the equity financing of our next 118 MW of wind projects in Chile represents an important milestone towards our goal of having in excess of 100 MW of power generating capacity in operation in Chile by the end of 2015. The Terms allow us to monetise the true market value of our development activities prior to construction, further enhance our earnings visibility and provide us with a clearly defined and de-risked route to full ownership at completion. We will be working closely with Santander to satisfy the various due diligence requirements and conditions precedent to move to a full contract and shareholders’ agreement on each project as we did with our first two projects, Raki and Huajache, both of which remain on track to become operational in Q4 2014. I look forward to providing further updates in due course.”