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Rame Energy rising as Chile wind assets are sold

Cash proceeds from the sale are already earmarked for the continued development of Rame’s other wind and solar projects.
Rame Energy rising as Chile wind assets are sold
It achieved a 50% increase in asset value in just 20 months

--UPDATE, ADDS BROKER COMMENT--

Rame Energy (LON:RAME) shares advanced around 5% after it announced the sale of its part owned Raki and Huajache Wind Projects, in Chile.

The company expects to receive US$4.4mln for its 20% stake in the assets.

It marks the first successful project exit for Rame, which developed the projects from ‘greenfield’ through construction and commissioning.

Cash proceeds from the sale are already earmarked for the continued development of Rame’s other wind and solar projects in Chile, as well as general working capital purpose.

As highlighted by chief executive Tim Adams, the cash injection will facilitate Rame’s strategy of ‘capital recycling’ to accelerate some of its more mature projects.

"We are delighted with the sale of the Raki and Huajache projects,” Adams said in a statement.

“Our estimated gain of approximately 50% of our investment over the period of 20 months demonstrates Rame's ability to deliver substantial returns in a relatively short time frame.”

"There is currently strong global demand for power generating assets backed by investment quality power purchase agreements in stable countries.”

Adams also highlights that Rame will continue to develop and advance projects either for sale or as part of its growing independent power producer (IPP) business.

He says he’s encouraged to see other international IPPs enter Chile, and he believes the market in Chile will “remain attractive for the medium term at least.”

Adam Forsyth, alternative energy analyst at Cantor Fitzgerald, in a note, said: “We see this sale as proving Rame's ability to find, develop and monetise renewable energy projects in Chile and, just as importantly, confirming that there are willing buyers for these assets in the marketplace.”

On AIM, Rame shares gained 0.5p, 5.13%, to trade at 10.25p each.

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