ATOME CEO on $420M debt financing & green fertiliser edge

Hello, you're watching ProAnx. I'm joined by a term CEO, Olivier Musette.

Olivier, very good to speak with you. You've secured $420 million in debt for Vieta.

What does this mean for the project and investor returns?

Quite key, actually. It's been talked about quite a while now, the discussion that we're

ongoing and finally, we have signed all of the documents, which relates to the financing.

You will have seen it signed with the European Investment Bank, FMO, the Dutch state-owned

development finance institution. We have IDB, the Latin American DFI,

AFC, the World Bank's private sector angle, as well as the Green Climate Fund.

So we went through the grinder for a better word of these DFIs and really they saw the

quality of our project. They saw the economic case, they saw the bankability of it,

and it's impact not only on food security and climate. So I think it just shows that we continue

to bring in tier one partners and that we are able to do things which are a lot larger than

our current market cap to be able to deliver the project. So they've given us very long-term

debt finance of extremely competitive terms. So it really goes in and helps enhance the returns

of our shareholders and the equity partners at the asset level, which are being led by high-24

as we had previously announced. So leverage into a project increases equity returns,

but as simple as that. The answer will make fertilizer without fossil fuels. How does that give

a total of an age in the market? So it's really about being here at the right place,

at the right time. So we have long-term low-cost power supply. The input is fixed, is very low-cost,

which allows us to basically deliver fertilizer at a cost cheaper than importing it from Russia

or the Middle East. So bang on, it is already a lowest-cost producer. The other side is obviously

from an off-take point of view. We've announced last year Yara, which is one of the largest

fertilizer company in the world, providing us with a long-term off-take for 100% of our production,

giving us basically a mechanism that allows to de-risk the project on the downside cases

and has an upside as well. The other part is yes, we are competing today gray on green. So we will

be producing low-cost fertilizer without we need for hydrocarbons, but we are able to complete

with hydrocarbon fertilizer production and basically be bankable. And where we have is basically

the green upside, which for some in the fertilizer sector may have seen. The carbon border

mechanisms are now in full force in Europe, and despite the rising price of fertilizer,

they remain in full force in Europe. So we have basically this super upside, which will come from

the fact that it is going to be the not only the lowest fertilizer in the region, but definitely

the lowest-cost green fertilizer in the region, which then end the world, because Yara will be able

to sell it globally, and we have the right partners to deliver it again. Olivia, you mentioned rising

fertilizer prices. And you also mentioned that this project could replace imports from Russia

or the Middle East. What does the current conflicts in the Middle East mean for the

sub-perturizer sector? So I think where people were overly comfortable for the past few years

on the supply of any chemicals, but especially a fertilizer, because a large part of fertilizer

nearly 30% come from Russia and its neighbors. Today, nearly 50% of the other 100% comes through

the state of Hormuz. And so we have a fertilizer world, which today is completely rocked,

and it's really showing its weakness. So the price of fertilizer went up by 50% in the span of

three weeks. And a number of these facilities have been attacked. And it's really showing that

we have a supply chain, which is actually extremely vulnerable, and that we are our thesis about

being in the heart of the market, away from that instability, right close to our clients,

close to the largest customers. And yet, because the price of fertilizer is decided,

like all in gas on the global scale, we keep also, obviously, the opportunity to have the upside,

because when the price of fertilizer goes up for us in Europe or Middle East, it goes up

also in Latin America. So when you have a fixed low cost of power, fixed off-take,

and you can basically be there to, obviously, underpin food security, underpin fertilizer supply,

you can still have access to the commodity upside. So sometimes, you know, I think everybody

understood it when we talked about critical minerals a year ago. The reality is just that

fertilizer is possibly more important than critical mineral, because we need to eat every day.

Vieta, a world-first project, and you plan to replicate the model, take us through the next

depths as you move forward. Oh, absolutely. I think, you know, and our investors and shareholders

who came in since day one, you know, and who believed in us, and we definitely thank them,

you know, they came in because it's not just one project, right? This one project, obviously,

will have, you know, very high returns and then PVs attached to it. The reality is we have done

world-first, right? We have done that type of off-take that we've put together is the first type

of off-take we've put together. That type of EPC arrangement with Casale from a construction point

of view, again, first time. So we went about the risking and creating a formula and having a,

you know, building a team that has the basically the right ways to deliver these projects

that can also exit these projects. And so, obviously, we've been looking in Paraguay, we've

been looking in other countries in the region, even outside of the region, because we've seen

that we have basically a four-year head start on everybody. So clearly, that side of the

replication is going there. We've also mentioned that we created another division called Aton Power,

which will also be able to take advantage of some of the synergies that we have and that we have

seen where clearly, you know, bringing lower cost renewable power, you know, solar plus battery

and so on actually has complementarity and will be, will be quite good to, obviously,

lower the cost of supply for our future projects, but also be an independent stream of cash flow,

which will come a little faster because clearly, you know, it would have taken us nearly four years

to get to that point when it comes to starting the building of a fertile plant. You can do that in

half of a time when you look at the power sector, but the other point, of course, is on the

replicability. You know, now it will be a lot quicker for us to go into project two and project three.

So clearly, we are ahead of the curve and we can definitely intend to remain ahead of the curve,

but as I mentioned, right, it's all about proving that you can deliver and you have the team to do it,

and what was closed last week on the dead side, you know, is really proof in the pudding,

and this is why it made so much noise in Latin America, right? This is the largest scale

hydrogen-linked chemical project that has been financed in the region. So we are very proud of that.

The work isn't finished. Over the next few weeks will continue to be busy,

but yeah, I think it's very great to have that recognition from some of the world's largest

development finance institutions. Congratulations, all that milestone. I hope you'll keep us updated

on your progress. I absolutely intend to. Thank you very much, Tiffin. Thank you. That's all

again. We'll start the CEO of Aton.