AIM-listed ATOME has provided an update further to previous announcements regarding the Power Purchase Agreement ('PPA') for the Villeta Project in Paraguay.
As previously announced, in May 2022 ATOME entered into a Power Purchase Agreement with ANDE, the Paraguay State-owned power company, that was subsequently amended to increase the committed power supply to 145MW ('the 2022 PPA').
On 17 September 2026, ATOME served on Paraguay a Notice of Dispute and Intent to Submit a Claim for Arbitration ('the Notice'), stating that the Paraguayan State violated its obligations under the UK-Paraguay Bilateral Investment Treaty ('UK-Paraguay BIT') by, among other things, revoking presidential decrees that guaranteed the long-term, fixed-priced supply of power to the Project and revoking its agreement to sign a revised and superseding long-term power supply agreement ('New PPA') guaranteeing ATOME the ability to purchase power at a fixed price which the State understood and acknowledged was necessary for the bankability of the Project following extensive meetings with ATOME and its funders.
ATOME had proposed a standstill with ANDE in relation to the 2022 PPA pending efforts to find a solution. It has not yet been possible however, to agree the form of standstill agreement at this point. Accordingly, in order to prevent prejudice to ATOME and avoid any potential liability it might incur by remaining bound by the 2022 PPA, ATOME, taking into account the relevant deadline in so doing, has given notice to terminate the 2022 PPA, with termination being effective at the end of 2026. The notice of termination should not, in the view of ATOME, hinder the efforts to pursue discussions with the Government and ANDE as to a new PPA to ensure the viability of the Project nor will it prejudice the rights of ATOME under the UK-Paraguay BIT.
ATOME therefore continues to work in good faith with ANDE and the Government towards a solution to allow this important international Project to proceed. ATOME's Villeta Project is firmly aligned with ANDE's own mission statement which it prints on all its stationery: '…to meet the country's electricity needs and operate with social and environmental responsibility in order to contribute to the development of Paraguay and the well-being of its people'.
The successful resolution of the current issue would demonstrate and reassure the international community that Paraguay remains a reliable and investable country for large foreign investments supported by institutional funding.
Source: ATOME
