ATOME: Significant progress at Costa Rica fertiliser project

14th February 2024 | ATOME PLC

Significant progress on Costa Rica major green fertiliser project

Framework Collaboration Agreement signed with ICE, Costa Rica’s state-owned power company

Meeting with President of Costa Rica demonstrates Government endorsement for the project

‚ÄčATOME (AIM: ATOM), the only international green fertiliser project development company on the London Stock Exchange, is pleased to announce material progress made by its Central America company, National Ammonia Corporation S.A. (“NAC”), relating to a green fertiliser project in Costa Rica.

Summary:

  • ATOME’s Central America company, National Ammonia Corporation S.A. (“NAC”) has entered into a Framework Collaboration Agreement (“the Agreement”) with Instituto Costarricense de Electricidad (“ICE”), the Costa Rican state power company to evaluate feasibility for the power supply to a green ammonia and fertiliser project (“the Project”).
  • The Agreement is the necessary and significant first step in securing 100% renewable baseload electricity for the country’s first industrial scale green ammonia and fertiliser project.
  • The endorsement from the President of Costa Rica, Mr Rodrigo Chaves, along with key members of his cabinet demonstrates the commitment to attracting foreign direct investments and a recognition of ATOME’s proven strategy of developing fertiliser projects with significant local impact.
  • Costa Rica is an optimal location for green fertiliser production with its existing renewable power, premium agricultural industry, and strategic regional position combined with access to both Pacific and Atlantic Ocean ports.
  • The Project will be of a similar size to ATOME’s Villeta Project, leveraging the key learnings to date, further validating the Company’s strategy for replicating and deploying green fertiliser production at scale, positioning ATOME as a leading developer of such projects in Latin America.

Framework Collaboration Agreement

NAC, a company whose shareholders comprise ATOME and Cavendish S.A, a local green-focussed business, has entered into a Framework Collaboration Agreement with ICE, the Costa Rican state power company.

The parties will work together on feasibility, design, and technical and economic assessments for the Project, including the development of a roadmap which both parties undertake to implement. An agreement for renewable power for the Project is expected to be entered into following the conclusion of the studies in H2 2024.

The significance of the Project and ATOME’s participation was underlined in a meeting in late January between Olivier Mussat, CEO of ATOME, and Rodrigo Chaves, President of Costa Rica. Other participants in the meeting were the President of ICE, the Minister of Energy and Environment, the Minister of Foreign Trade, the Vice Minister of Agriculture and other key governmental figures. Led by President Chaves, a clear expression of interest was shared to bring this Project to Costa Rica, considering the location in a rural area and sustainable development impact of the project including significant jobs creation.

Costa Rica

Costa Rica is a stable democracy with an open economy and deep trade relationships with the UK and the United States. Costa Rica’s electricity grid is 99% powered by renewable sources and managed by ICE, making it one of the greenest countries in the world and thereby enabling the Project to comply with existing rules and definitions on ‘green’ production (for example, EU RED II).

Costa Rica is a major world food producer. The country is the world’s largest supplier of pineapples, in the top ten banana growers, and a premium coffee producer, to name only a few of its products. Whilst exporting c.US$1.6 billion worth of agricultural products in 2023, Costa Rica is entirely dependent on imported fertiliser to sustain its food industry with farmers consuming 4.5 times the world average per hectare of arable land. The country’s strategic location between the Pacific and Atlantic Oceans with ports in each ocean separated only by 240 kilometres, provides access not just to Latin America but also North America, including California, as well as Asia and Europe.

Strategy

Progress in Costa Rica further validates ATOME’s strategy of project development in geographies with available renewable power, access to existing infrastructure and logistics, and significant domestic and export potential for green ammonia-based fertiliser.

The Project is expected to leverage major advancements made at the 145MW Villeta Project in Paraguay, benefitting from key learnings and therefore optimising project development costs and timelines.

ATOME now has three industrial scale green ammonia and fertiliser projects in development in Central and South America and has positioned itself as the leading player in green hydrogen-based agriculture products in these territories.

In Iceland, ATOME has decided to develop its projects through its wholly-owned UK subsidiary, ATOME Iceland Limited. As a result, ATOME is conducting a voluntary members (solvent) winding up of the Company’s previously 75% and subsequently wholly owned Icelandic subsidiary, Green Fuel ehf which is expected to have an immaterial financial effect.

Olivier Mussat, ATOME’s CEO, commented:

“Within a year since the creation of NAC, thanks to the significant progress on our Villeta project and our strong local team led by Cavendish SA, we have been able to establish an excellent working relationship with ICE with the aim of building Costa Rica’s first green fertiliser facility.

“There is a substantial local market for the fertiliser we intend to produce as well as being strategically located to access global markets. Costa Rica is viewed as a prime investment destination with significant existing foreign investors such as Intel, Microsoft, and Amazon.

“Whilst the 145MW Villeta Phase 1 Project remains the near term priority of the team, the progress made on Costa Rica is significant news for ATOME. Beyond adding another flagship project to our pipeline, it is a demonstration of ATOME’s business plan and its growing reputation as a world leader in green fertiliser. It also shows that ATOME’s own developed technical and commercial IP is able to be replicated on a cost-effective basis elsewhere giving us a significant edge in speed of mobilisation, costs and efficacy.”


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