Ram Power announces tariff increase for San Jacinto-Tizate
San Jacinto-Tizate, geothermal power plant, Ram Power/ Polaris Geothermal Nicaragua (source: Ram Power)
Alexander Richter
11 Oct 2012
Ram Power Corp. reaches agreement with Nicaraguan government on the increase of the power sales tariff for the San Jacinto-Tizate project, which helps the company to recover unanticipated project costs for development of the project.
In a release yesterday, Ram Power, Corp. (TSX: RPG) announced “that it has reached an agreement with the Nicaraguan Government to increase the power sales tariff for the San Jacinto-Tizate geothermal power project.
The tariff increase request was thoroughly reviewed by the Nicaraguan Ministry of Energy and Mines (“MEM”), the Nicaraguan Energy Institute (“INE”), Disnorte-Dissur, a subsidiary of Gas Natural Fenosa (the power purchaser under the power purchase agreement for the Project), and the Nicaragua Energy Cabinet whose recommendation was subsequently acknowledged by Nicaraguan President Daniel Ortega. The formal documentation implementing the increased tariff is now expected to be registered expeditiously by INE.
Ram Power’s Executive Chairman, Antony Mitchell, stated, “We are grateful for the continued confidence and support of our project, and our company, at the highest levels of the Nicaraguan Government. President Ortega expressed a need to continue the development of the renewable energy sector in Nicaragua, and we look forward to continuing the relationship in the form of future projects and development.”
The approved increase will allow the Company to recover unanticipated Project costs associated with both the development of the resource and plant construction. The power sales tariff increase of approximately 17% is effective October 1, 2012, with annual escalation of 3% through and including 2022 and 1.5% thereafter through 2028. The new tariff is comparable with current tariff rates of other renewable energy producers in Nicaragua.
The Company’s extensive negotiations and discussions with the Nicaraguan Government represent a mutual understanding and focus to work together on achieving the country’s objective to expand the development of clean, base load renewable energy in the region. The new tariff provides a long term foundation for the operation of the Project and represents another step in the development of Nicaragua’s renewable energy sector resulting in lower energy costs and continued stable employment for the people of Nicaragua. Notwithstanding the increase to the existing tariff, the Project will still be selling power at 37% below the average wholesale electricity price in Nicaragua, and will generate approximately 17% of Nicaragua’s total electricity needs.
Emilio Rappaccioli, the Minister of MEM, stated, “Development of the San Jacinto project has become an example of natural resource development currently going on in Nicaragua. The development of these types of renewable energy projects is an essential component for Nicaragua’s future, further promoting the wellbeing and progress of the people of Nicaragua.”
“The continued development of the San Jacinto project translates directly into clean, renewable base load energy for the people of Nicaragua at a discount to the current fossil fuel generation,” said Jose Antonio Rodriguez, Vice President Operations and COO of the Company’s Latin America subsidiary. “We would like to thank both Disnorte-Dissur and Gas Natural Fenosa for their continued support of our project as well as their desire to decrease overall energy costs in Nicaragua.”
Shuman Moore, CEO of Ram Power, said, “I am very pleased with the efforts of our Nicaraguan team in achieving this historic milestone for our San Jacinto project. The increase to the power sales tariff has a direct benefit to the long term financial stability of the Company, is in the best interests of Nicaragua, and continues our focus and dedication towards increasing the shareholder value of the Company.”
Source: Company release via Marketwire
