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Rame Energy agrees US$4mln loan to fast track Chile portfolio

Published: 08:21 25 Apr 2016 BST

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Rame wants projects at ready to build level by 2017

Renewables group Rame Energy PLC (LON:RAME) has agreed a US$4mln development loan with InterEnergy Holdings to develop 11 projects in Chile.

InterEnergy is a specialist investor in Latin American and Caribbean power projects and previously bought Rame’s Raki and Huajache projects and has agreed to buy Punta Chome and Raki Sur, both of which are under development. 

Rame wants to get all of the 11 projects to be funded by the loan and that have 210Mw of capacity to 'ready to build status'  (RTB status) by the end of 2017.

Once a project  achieves RTB status, InterEnergy can acquire it for a price of between US$120,000/Mw and US$160,000/MW dependent on future forecast returns.

The combined prospective value of all the projects at RTB status is between US$25.2mln and US$33.6mln. 

Rame said it currently intends to sell them at that stage to develop others and repay debt, but it can develop them itself or sell any projects that InterEnergy declines.

The money is available in tranches of US$1mln over the next 30 months with the first tranche to be drawn over the next week. The loan carries an interest rate of 8% per annum and is repayable in full within 30 months of the first drawdown.

Tim Adams, chief executive, said the funding would allow it to fast track the final stages of development of its projects in Chile projects, but also builds on the strategic relationship with InterEnergy.

“The pricing metrics in this agreement, similar to those included in our recent sale of Punta Chome and Raki Sur, validate and underpin the inherent value of our project pipeline.

“Completing the development of these projects over the next eighteen months or so will deliver saleable projects with a potentially realisable value of $25mln to $34mln."

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