Shares in ATOME PLC (AIM:ATOM), the AIM-listed low-carbon fertiliser developer, rose 24% to 61.5 pence after it signed debt financing agreements worth $420 million for its planned plant in Villeta, Paraguay.
The fifteen-year debt package was signed on 12 March at the annual meetings of the Inter-American Development Bank Group (IDB Group) in Asuncion, and has been provided by a consortium of five development finance institutions.
Around 25% of the debt has been provided on concessional terms, meaning at below-market interest rates, which ATOME said would reduce its overall cost of capital and improve returns.
The Villeta plant, which will cost $650 million in total, is designed to produce 260,000 tonnes of low-carbon fertiliser annually using renewable energy rather than fossil fuels, which ATOME claims would make it the largest facility of its kind in the world.
All of the plant's output is covered by a long-term take-or-pay agreement with Yara International, the Norwegian fertiliser group, under which Yara is contractually obliged to purchase the full production volume at agreed prices.
The remaining $244 million of project funding will come from equity, with definitive equity agreements expected to be signed within 30 days.
ATOME is expected to provide management services to the project company, including filling the chair, chief executive and project director roles on a paid basis.
Peter Levine, chair of ATOME, described the project as "a game-changer for the fertiliser sector, particularly in the increasingly important South American region."
The company said recent geopolitical events had underlined the strategic value of a fertiliser supply chain free from fossil fuel dependency, at a time of heightened concern over food security and energy price volatility.