Rame Energy : Chilean On-Grid Wind Projects Update

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

27 May 2015

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

Chilean On-Grid Wind Projects Update

Rame, the independent power producer, is pleased to provide the following operational update regarding its Chilean on-grid wind projects.

Raki / Huajache 15MW Wind Projects

Certification for the final grid connection is pending. The nature of the Raki / Huajache projects, whereby they are electrically separate for qualification under the Chilean renewable energy regulations ("PMGD") but share a newly built collector substation onsite is a first in Chile. As a consequence, additional legal definition and technical input from the system operator on PMGD compliance has been required, which has led to a slight delay in obtaining certification. The minor modifications required to the substation in order to comply with the clarifications received are expected to be completed shortly.

Taking the above into account, EKA, the counterparty to the power purchase agreement ("PPA") for Raki / Huajache, has agreed to delay the start date for the PPA to allow for final completion of the projects.

Santander Investment Chile Limitada ("Santander") and Rame have now agreed on completion dates tied to a final commercial account with EPC contractor Vestas. This agreement remains subject to final approval within Santander which is imminent and anticipates commencement of energy sales in the middle of June.

Rame holds a 20% equity interest in the project alongside Santander.

Santander Portfolio

As previously announced, Rame has been gathering further wind data at the next potential project sites in the Santander portfolio which have a combined capacity of 133 MW.

Following the installation of taller 112m wind measurement masts last year, the physical data gathered at close to nacelle height over the last seven months indicates an increase in potential annual energy production of more than 25% over the originally calculated outputs for the next two projects totalling 54MW to be built. The Directors estimate that this could correspond to a significant increase in the net present value of the projects in question.

The new data is now being analysed to conclude turbine selection and the Company has embarked on a detailed programme of consultation with local government and in particular the nearby communities whilst pushing forward on the outstanding permitting and technical definition.

CEO Tim Adams said "We are pleased that we have now received full clarification on the certification process for Raki and Huajache from the grid operator and that with our partner Santander, we have also achieved commercial close out of the EPC contract. Both Rame and Santander are now firmly focused on evaluating and progressing the next 54MW of projects and we are particularly pleased to see that our enhanced monitoring is giving strong indications that returns from these assets will be significantly better than previously expected. Our experience with wind project development and construction in the 8th region of Chile has fostered a close working relationship with local government and the communities which we believe will stand us in good stead during the delivery of the next larger projects in this area of strong wind resource. I look forward to providing further updates as the projects progress."

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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 Raki and Huajache projects. These two projects, in which Rame has a 20% equity participation, will have 15MW of generating capacity and have now been mechanically completed. The debt package for the two projects is being provided by Chilean bank, Banco BICE.