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

0:00Hello, 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,

1:00and 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

2:01or 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

3:06the 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

4:08three 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

5:09fertilizer 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

6:15that 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,

7:18but 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.