Punta Chome Project Update

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

25 April 2014

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

Punta Chome Project Update

Rame Energy plc, the international energy consultant, engineer and power generator, is pleased to announce that it has executed binding terms leading to a power purchase agreement ("PPA") for its Punta Chome wind project in Chile. Empresa Electrica ERNC-1 SpA, a Chilean energy fund which purchases variable renewable power output and sells firm power to industrial customers, has agreed, subject to final documentation, to purchase all the energy generated from Rame's 9MW Punta Chome project for ten years from the start of operations. Punta Chome is, subject to financing, due for construction in 2014 with power output expected in 2015. 

Punta Chome is located in Region VIII of Chile, approximately 270 miles south of Santiago, on a peninsula adjacent to the coastal town of Concepción. Rame installed monitoring equipment at the site in September 2006 and has been recording and analysing wind data since this time, confirming the high energy generating potential of the project. Once the Punta Chome project is complete the Company will have an interest in three wind projects totalling 24MW. This is in line with Rame's strategy to utilise its proven expertise as a revenue generative global supplier of power related engineering and construction services to blue chip clients, to become a leading Independent Power Provider ("IPP") in Chile. The Company is targeting an operational portfolio of 300MW within three years.

Rame has completed the detailed technical and commercial evaluation of potential turbine suppliers for the Punta Chome project resulting in the selection of Danish wind turbine manufacturer Vestas. Based upon the agreed commercial terms, Rame has awarded Vestas exclusivity for the supply of three V126 3.3MW wind turbines. Vestas will supply, transport, erect and commission the turbines and Rame will undertake the civil and electrical work.

Rame CEO Tim Adams said, "Rame will be involved in the construction of three wind projects in Chile totalling 24MW during 2014 and these binding terms for the output from our 9MW Punta Chome project represent an important milestone. We now have power purchasers secured for our entire 2014 wind portfolio, demonstrating both demand for power in Chile and also our ability to deliver on our strategy to rapidly develop a pipeline of wind projects. This will enable us to build on our existing revenues through our transformation into an IPP in Chile.

"Our agreement with Vestas to supply, erect and commission the turbines builds on the relationship established during the first two projects, and by utilising the V126 turbine we are maximising power generation and therefore project economics. Construction of Punta Chome is, subject to project financing, on course to commence later in the year ahead of commissioning in 2015 and I look forward to providing further significant updates on this in the coming weeks."

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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 BHP Billiton. 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 will have a 20% equity participation with an option to increase to 100%. 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% of Chile's installed wind power capacity (as at 31 December 2013).