SP Angel repeated a ‘buy’ recommendation for ATOME Energy PLC (AIM:ATOM) after securing a 60 megawatt power purchase agreement (PPA) for its project in Villeta, Paraguay.
In a statement this morning ATOME said it will now be able to “move expeditiously” towards the pre-construction phase of its green hydrogen and ammonia production project.
Analyst David Mirzai, in a note, highlighted that SP Angel now planned to update its risked valuation to take account of the project, pending further information from ATOME.
“In our view, the ATOME investment case offers investors exposure to an exponentially growing market, with first mover advantage in two strategically important geographies with regards to the monetisation of green hydrogen and ammonia,” Mirzai added.
For Villeta, the PPA gives the project 100% renewable power immediately from the state power company Ande, with no need to add new infrastructure and no consideration payable in relation to access the power.
Power from the local substation will be priced on the lowest industrial standard tariff, which Atome said would enable it to be cost competitive in the international as well as domestic marketplace.
“With the PPA now executed, the next steps of the project comprise the execution of the planning, engineering, procurement, logistics, build out and commissioning stages,” Atome said.
Chief executive Olivier Mussat, said: “We are excited to be moving ahead of the already aggressive targets we had set ourselves when we listed Atome in December 2021.
“Executing our first major large scale power purchase agreement now comes at the right time in light of the urgency to increase the supply of fertilisers, prices for which have nearly quintupled over the past two years, with ammonia prices now over $1,500/MT.
“As we continue to develop our 250MW+ projects in Paraguay, the opportunity to interpose and add 60MW now with this new site in Villeta is very attractive.
“In itself, this facility would be of world scale in its own right. Villeta with the readily available renewable power is a perfect site to fast track Atome's first project as it is very convenient for all types of potential off-taker. At 60MW Villeta is also right-sized, enabling us to build our facilities rapidly, with minimal infrastructure build out and opens the opportunity to supply both the domestic and export markets.”