Rame Energy has today announced the launch of its UK solar generating subsidiary. CFO Kevin McNair answers some key questions...

Q1. Can you outline the rationale for this new activity?

We are already developing our rooftop solar generating portfolio in Chile and recognised that there are opportunities in the UK market. We know that that the offer of cheaper electricity - without any capital investment - under a 20 year PPA is attractive to businesses and our in house capabilities allow us to control the project development whilst retaining the construction margin so it's a win-win proposition.

Q2. How does the financing work?

The PPA model requires a level of capital investment to fund installations we have deliberately put a corporate financing structure in place to allow for efficient management of the generating assets. These assets will provide an additional revenue stream with stable, robust and attractive long term returns via the UK government feed in tariff.

Q3. What is the potential for growth?

We will initially own and operate up to four UK projects with a total potential capacity for 120kW. Beyond that, we believe the UK market is ripe for growth. Electricity costs form a substantial part of business overheads and, with an EU Directive to reduce the number of coal fired power stations, these costs are widely predicted to increase. We believe the appetite for cheaper electricity under transparent contract terms is growing and we are ideally positioned to capitalise.

Date: 10 July 2015

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