Friday, May 18, 2018

Sweden: Climeon Reports Rapid Progress in Geothermal Heat Power Projects

Climeon Investor News - Interim report for the period 1 January - 31 March 2018 (News Release)

Important events, January - March included:

  • In January 2018 Climeon owners Gullspång Invest AB, LMK Forward AB and Blue AB decided to establish the financing company Baseload Capital Sweden AB (Baseload Capital) to accelerate global geothermal heat power projects. Climeon will participate through a minority stake of 19.9 percent 
  • A business agreement worth over EUR 5 million was signed in February 2018 with the German energy provider Geoenergie Kirchweidach, resulting from the Letter of Intent signed in the fourth quarter 2017 

Important post-closing events include:

  • During April, a new business agreement was signed with Borealis GeoPower, Canada, worth around EUR 1 million. Climeon has thus won the world’s first order of geothermal power plant in Canada
  • A representative office opened in Japan to investigate and evaluate Climeon’s potential in the local market 

Thomas Öström CEO: We see proof after proof that it is attractive for customers and financial backers to invest in geothermal heat power. The plants produce electricity around the clock, all year long, and electricity producers can sign long-term Power-Purchase Agreements (PPA) with a fixed price (i.e. during 15 years) for the electricity supplied to the grid. A product that makes electricity from hot water thus makes money out of hot water with great predictability for a long time to come. Cash flow and investments can thereby be calculated, which also makes it easier for customers to obtain financing. 

The existence of Baseload Capital is a clear advantage since customers frequently need to finance their investments externally. For understandable reasons, banks lack experience in financing our type of heat power, which means that the processes are slower when using a bank. Baseload Capital focuses entirely on sustainable baseload power, and can offer our customers pre-approved loans with favorable conditions. Baseload Capital provided financing for both Icelandic Varmaorka and U.S. Wendel, thereby freeing Climeon from its previous financing commitments to these customers.