29th Sep 2015 10:59
LONDON (Alliance News) - Rame Energy PLC Tuesday said it plans to sell its stake in its Chilean wind farms in order to generate cash to reinvest into its pipeline and said it will progress its most advanced on-grid projects to the point of financial close within the next six months.
The renewable power producer and project development company reported a USD1.1 million pretax loss in the first six months of 2015, broadly flat year-on-year despite revenue rising to USD3.0 million from only USD397,944.
"Over the first six months of 2015 we have seen the completion of our first 15MW wind farm since the IPO, our first roof-top solar installation in Santiago, and the commencement of construction at the Cerro Bayo mine project," said Chief Executive Tim Adams.
"This combined with strong operating income in the UK has seen us return our engineering revenues to pre-IPO levels and this should continue through the second half of the year," he added.
During the half, Rame completed two wind farms alongside its equity partner, Santander. Construction of the Raki and Huajache projects, which together comprise 15.0 megawatts of capacity, commenced in May 2014 and was completed in August 2015 when the company achieved its first power sales.
Santander has decided to sell its stake in the two projects and has received indicative offers for both. Rame has the option of selling its stake in the projects alongside Santander, and said it will do so if it can achieve the current value of the projects, said the company.
"The market for operating renewable assets in Chile is very active right now with a number of international investors looking to enter the Chilean power market. As a result, asset prices have increased significantly over the past twelve to eighteen months," it said.
In May, Rame announced that it had completed the funding of the 1.8 megawatt off-grid Cerro Coihue project in conjunction with Anden Re Capital SpA. Construction commenced shortly thereafter and the group expects the first power sales to take place in the fourth quarter of 2015.
"In the UK, our solar subsidiary, Beco, has had a good six months and the order book for the remainder of 2015 and on into 2016 looks very healthy. What is less clear, however, is what the future will look like following the UK Government's consultation process as part of a review of the feed-in tariffs for solar projects," said the company.
The Feed-In-Tariffs were designed to promote the uptake of smaller-scale renewable and low-carbon electricity generation technologies and requires electricity suppliers to make set tariff payments for renewable and low-carbon electricity. However, the government is attempting to bring subsidy costs down after the Department of Energy and Climate Change realised it had already overspent its budget to support renewable energy projects over the next five years by GBP1.50 billion.
"Our focus over the next six months will be to progress our most advanced on-grid projects to the point of financial close. We have identified a list of priority projects with strong financial returns that are in the late stages of development. We intend to progress these projects to the point of being shovel ready in 2016," said the company.
Rame shares were up 2.2% to 6.64 pence per share on Tuesday
By Joshua Warner; [email protected]; @JoshAlliance
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