ATOME, a developer of international green fertilizer projects, is pleased to announce the signing of Heads of Terms for the long-term sale to Yara International ASA of all of ATOME’s renewable fertilizer from its 145 MW Villeta Project in Paraguay.
Highlights:
· Long-term Offtake with Yara for ATOME’s renewable Calcium Ammonium Nitrate covering the entire planned 264,000 tonnes p.a production from Villeta
· Yara is the world’s leading crop nutrition, production and distribution company of fertiliser and ammonia product and is at the forefront of decarbonisation in its industry with Government of Norway the largest shareholder with 43% direct and indirect ownership
· With Front End Engineering and Design (“FEED”) completed, Offtake has now secured a key gating item on the way to achieve full financing of the Villeta Project, Final Investment Decision (“FID”) and start of construction later this year
· Validates ATOME’s commercial proposition and leadership in the production of renewable fertilisers
· Supports ATOME’s pipeline of projects with income generation and operational profitability for Villeta targeted to commence in 2027
Olivier Mussat, ATOME CEO, commented: “The entry into this strategic relationship with global crop nutrition leader Yara is a significant milestone for ATOME on the path to realise our flagship Villeta Project which will be one of the largest renewable fertiliser production facilities in the Western Hemisphere. Proving significant off-taker interest for our renewable product gives a clear path to the finalisation of funding, FID and the commencement of work onsite at Villeta.
Importantly, it provides the confidence for ATOME to now accelerate the development of its project pipeline, including the 300 MW Yguazu project in Paraguay and the 120 MW Costa Rica projects.”
Chrystel Monthean, EVP Americas at Yara, commented: “Decarbonizing the food systems is at the forefront of our strategy. Many of the food companies active in South America have committed to decarbonization targets and our collaboration with them reveals that the decarbonization of the production of fertilisers combined with the use of agronomical best practices can significantly reduce the crops’ carbon footprint. Signing the Heads of Terms with ATOME for the Villeta project is a first step to open the opportunity to further expand our portfolio with fertilisers produced with renewable energy in the Americas. The fertilisers from Villeta will become part of a new portfolio called Yara Climate Choice, including fertilisers based upon renewable energy and carbon, capture and storage. The project’s in-land location could open logistical advantages for some of our growing markets in Mercosur.”
The Heads of Terms
Subject to the entry into a definitive agreement anticipated before the end of Q4 this year, the Heads of Terms covers all of ATOME’s Villeta production and validates the commerciality of ATOME’s business model reflecting both a price protection mechanism for ATOME underpinned by current market rates, and a premium upside sharing formula for ATOME’s product pricing, whilst providing Yara, over a long term, the supply of renewable fertiliser with a particular emphasis on the growing Latin American markets.
Yara will work to maximise market potential and the premium value proposition of the renewable product benefitting from Yara’s extensive sales, marketing and distribution network combined with decades of experience in global markets.
Gateway to Final Investment Decision
Offtake was a key gating item successfully crossed in order to proceed with the next steps of finalising the funding for the project and deliver FID, leading to the commencement of construction later this year. This significant milestone follows on from the progress already achieved by ATOME including the grant of Environmental and Operational licenses, obtaining Free Trade Zone status at Villeta, necessary land acquisition, the FEED completion and the bringing of EPC discussions to a point of readiness for pressing the green button later this year.
In respect of the funding of Villeta, led by ATOME’s international financial advisors, Natixis CIB, the debt portion for the project is now nearly three times covered by solid expressions of interest with substantive and encouraging equity discussions with international players taking place and moving to next stage of the process, all such being on a project level.