Banco Santander, the largest bank in the Eurozone by market value, will acquire stakes in four Chilean wind developments from U.K.-based Rame Energy. The bank will provide with US$69 million of equity funding for the wind power projects.
Santander Investment Chile Ltda. will invest 80% to 90% of the equity capital for 118MW of projects, while Rame has a call option right to reacquire Santander's equity upon commencement of the commercial operations. The projects are expected to be operationals by 31 December 215 at the last.
The terms also specify that Santander should be considered first for the equity financing of future projects developed by Rame up until the end of 2016.
This Agreement formally builds on the company's existing cooperation with Santander, which has seen Santander co-finance Rame's first two wind projects Raki/Huajache in Chile totalling 15MW. It expects to start putting up the wind turbines of the projects in October and the sites should be operational in the fourth quarter. EKA Chile SA will buy all of the energy they produce for ten years.
Tim Adams, Rame CEO, stated:
This framework agreement with Santander for the equity financing of our next 118 MW of wind projects in Chile represents an important milestone towards our goal of having in excess of 100 MW of power generating capacity in operation in Chile by the end of 2015. The Terms allow us to monetise the true market value of our development activities prior to construction, further enhance our earnings visibility and provide us with a clearly defined and de-risked route to full ownership at completion. We will be working closely with Santander to satisfy the various due diligence requirements and conditions precedent to move to a full contract and shareholders' agreement on each project as we did with our first two projects, Raki and Huajache, both of which remain on track to become operational in Q4 2014.
Rame Energy is an international energy consultant, engineer and power project developer with a decade of global experience in power generation projects using conventional fuel or renewable energy sources.