Good morning Northland has provided comment on today’s release from Rame Energy, the Independent Power Producer, which gave an update regarding its first 15MW Raki/Huajache wind project in Chile.

Significant cost savings have been identified which should boost the IRR for the project and while a landslide has caused minor delays to the commissioning, this is not expected to majorly affect the overall timetable of the project, which is due to become operational in Q1 2015. Northland has a BUY rating and a 31p price target, which represents a 154% increase on the current price. The note and the press release is below. Lizzie Rame Energy (RAME.L) – BUY*: Raki/Huajache update Market Cap: £12.4m; Current Price: 12.2p
· Cost savings should boost IRR; landslide causing short term delay · Significant potential savings in capital expenditure and reductions in transmission costs on the 15MW Raki/Huajache wind project (where Rame has a 20% stake) have been identified following recent clarifications of energy legislation.

This could improve the internal rate of return (IRR) of the project by c.

1.5% to c.

17.5%. · The cost of new transformer bay at the substation that will connect Raki/Huajache to the grid will now be spread between all generators and not as part of the project cost as the transformer is classed as part of the overall system.

In addition, savings in operational expenditure of c.

$2m over the life of the project will be achieved. · A landslide is currently restricting the delivery of components to the project site by turbine supplier, Vestas.

It has elected to delay delivery until the preferred route is cleared by the authorities rather than using an alternative route.

Clearing the preferred route could take three to four weeks and Vestas is aware that it may be held liable for liquidated damages due to the delay.

Some time may be recovered during commissioning.

Prior to this the project had been progressing on schedule. · Forecasts and price target are currently under review.

We maintain our BUY rating. NORTHLAND CAPITAL PARTNERS VIEW: A mixed update on the 15MW Raki/Huajache wind project but positive overall with the reduced transmission capex and operating costs more than offsetting the short delay that is beyond Rame’s control.

Even this delay may be mitigated through liquidated damages payable by Vestas.

The savings on the transformer bay coupled with greater efficiencies could boost the project’s IRR by 1.5% to 17.5%.

We maintain our BUY rating.
Rame Energy / Index: AIM / Epic: RAME / ISIN: JE00BBD8GG53 / Sector: Energy 16 December 2014 Rame Energy plc (“Rame” or the “Company”) Update on Raki / Huajache Wind Power Project, Chile Rame Energy plc, the Independent Power Producer, is pleased to provide the following operational update regarding its 15MW Raki / Huajache wind project (“the Project”) in Chile, in which it holds a 20% equity interest alongside Santander Investment Chile Limitada (“Santander”).

Raki / Huajache are two of the Company’s first six wind projects in Chile totalling 133 MW that are at various stages of development. The Company is pleased to report that significant potential savings in capital expenditure and reductions in transmission costs have been identified following recent clarifications of energy legislation in Chile.

The Directors estimate that this could improve the internal rate of return (“IRR”) of the Project by approximately 1.5%.

As a result, Rame’s IRR for the Project could increase to 17.5%. Potential savings have been identified as follows:
· The cost of the new transformer bay at the substation that will connect Raki/Huajache to the grid will now be spread between all generators, and not borne by the Project alone because the transformer is now classed as part of the overall system and not ‘additional equipment’.

In addition, savings in operational expenditure of approximately USD 2million over the life of the project will also be achieved. Whilst to date the Project has been progressing on schedule, a landslide is currently restricting the delivery of components to the Project site by turbine supplier Vestas.

Consequently Vestas has elected to delay the delivery until the preferred route is cleared by the authorities as the alternative route would have incurred additional transportation costs.

Clearing the preferred route could take 3 to 4 weeks and Vestas is aware that it could be held liable for liquidated damages due to the delay.

Whilst turbine erection will be slightly delayed as a result, it is possible that some time will be recovered during commissioning, particularly as this process will now not experience interruption due to the festive season holidays. Tim Adams, CEO, commented, “We pride ourselves on completing projects on time and on budget and it is frustrating that, due to factors entirely beyond our control, there will now inevitably be a short delay in the commissioning of the turbines.

That said, we do not consider the delay to be of particular material significance to the overall project timetable which is positive. “In addition, the savings we anticipate have the strong potential to significantly enhance the Project’s IRR.

This will be welcome news for all our stakeholders and I look forward to providing a positive update regarding all our operational activities in the near term and of course on the commissioning of this project early in the New Year.” **ENDS**
Enquiries Rame Energy plc Tel: +44 (0) 1752 565638 Tim Adams (Chief Executive)
Jan Gawel (Finance Director)
Northland Capital Partners Limited Tel: +44 (0) 20 7382 1100 Nominated Adviser and Broker
Matthew Johnson (Corporate Finance)
John Howes (Corporate Broking)
St Brides Media & Finance Ltd Tel: +44 (0) 20 7236 1177 Elisabeth Cowell / Frank Buhagiar
Notes Rame Energy is an experienced Independent Power Producer, providing on-grid and off-grid power solutions to industry by generating renewable energy: primarily wind and solar. Blue chip clients include 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% equity participation.

The debt package for the two projects is being provided by Chilean bank, Banco BICE. Rame is 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.

To date, in Chile, Rame has been involved the evaluation and design of over 1GW of potential wind generation capacity, successfully permitted over 230MW and constructed over 50MW.
[cid:image002.png@01CECBDD.61F8A860] Elisabeth Cowell St Brides Media & Finance Ltd 3 St Michael’s Alley, London, EC3V 9DS www.stbridesmedia.co.uk Tel: 0207 236 1177 | Mob: 07900248213 | Twitter: @StBrides1