Placing to Advance Wind Farms, Chile

Rame Energy / Index: AIM / Epic: RAME / ISIN: JE00BBD8GG53 / Sector: Energy

28 August 2014

Rame Energy plc ("Rame" or the "Company")

Placing to Advance Wind Projects 

Rame Energy plc, the international energy consultant, engineer and power generator, is pleased to announce that, in order to expedite the development of 118 MW of wind projects and potentially improve the already robust economics of these projects, it has raised £750,000, (before expenses) through the placing of 4,838,710 new ordinary shares (the "Placing Shares") with both new and existing private and institutional investors at 15.5p per share (the "Placing"). 

Reasons for the Placing and Use of Proceeds

On 16 June 2014 the Company announced that it had 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. The Placing will allow the Company to expedite the due diligence required by Santander under the Agreement. By accelerating various final studies and permitting (where not already in place or complete on a project) the Company can bring forward the point of the investment decision on each project and, if positive, a move to financing and construction under the Agreement which will provide substantial near term earnings for the Company with Santander buying into each project at a fixed price per MW under the Terms.

In addition, proceeds of the Placing will be used for taking wind measurements at 100m above ground level at the four projects. The data gathered will be used to calibrate the extensive existing wind measurements taken by Rame at the project sites.

This new data will enable the Company to accurately analyse the enhanced energy outputs achievable using the latest generation of large high efficiency wind turbines now becoming available in the market. This has the potential to improve the already robust economics of these projects. The bigger turbines, which operate on taller towers, hence the need for higher measurements, have the potential to increase the energy yield significantly for the same installed capacity. Consequently the reduction in the number of turbines required reduces the cost of the balance of plant and thereby improves the capex per MWh. The results of the new measurements will be used to refine project models over the next three months and will continue to provide valuable data thereafter.

The Placing Shares will rank pari passu in all respects to the Company's existing ordinary shares. Upon admission to trading on AIM, the Placing Shares will represent approximately 5 per cent. of Rame's issued share capital, as enlarged by the issue of the Placing Shares. Application will be made for the Placing Shares to be admitted to trading on AIM, with dealings expected to commence on 29 August 2014.

Total Voting Rights

Following admission of the Placing Shares, the Company will have a total of 101,097,444 ordinary shares of no par value in issue, with each share carrying the right to one vote. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change of their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Tim Adams, CEO, commented:

"We are very pleased to have secured this funding to accelerate the due diligence required under the Terms of the Santander framework for the financing of our next four wind projects in Chile totalling up to 118 MW. The ability to accelerate these four projects and the opportunity to bring them on stream together creates greater economies of scale, which should result in better returns. Furthermore, the potential to upscale the turbines we use in the projects could result in a material improvement on our expected IRR per project factoring in the higher yields and reduced capex and demonstrates our commitment to delivering fully optimised power plants. By doing this we can offer attractively priced power to our customers whilst maximising returns to the business and this fundraising also reflects our very strong focus on linking any capital deployment to short term earnings growth."

**ENDS**

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Notes

Rame is an established revenue generative global supplier of cost effective, technically optimised and reliable power generation solutions including wind, solar and diesel to blue chip clients such as Akzo Nobel, Anglo American, Barrick Gold and Codelco. The Company has executed its first joint venture agreement with Santander Investment Chile Limitada to co-finance its first two wind projects totalling 15 MW, in which Rame has a 20 per cent. equity participation. The debt package for the two projects is being provided by Chilean bank, Banco BICE.

Rame aims to become a niche Independent Power Producer ("IPP") targeting an operational portfolio of 300MW in Latin America within three years. The Company plans to build on its proven track record of delivering power in South America where it has been involved in the development of approximately 23 per cent. of Chile's installed wind power capacity (as at 31 December 2013).