Conditions fulfilled in Icelandic geothermal deal
- Order now binding as pre-conditions are met
- Baseload Capital provides financing to Varmaorka
The key pre-conditions of Climeon's deal with Icelandic Heat power operator Varmaorka (owned by CP Energy) have been met. Delivery of the first seven modules will now begin. At the same time Baseload Capital Sweden AB has agreed to fund the first phase of the deal, enabling Climeon to focus on production and delivery
Per the agreement, first reported in August 2017, Varmaorka will buy 100 modules from Climeon, an order with a total value of more than 30 MEUR. The first phase of the order consists of seven modules, and delivery will start in the second quarter 2018.
In the original agreement Climeon took on part of the financing of the project. This responsibility has now been assumed by Baseload Capital Sweden AB, in the form of an investment and a loan.
"Climeon's modularity and efficiency have proven key in securing the sites for the planned roll-out of distributed geothermal power throughout Iceland. Ever since our first contact with Climeon, less than 9 months ago, the progress has been very positive. Now, with Baseload Capital as a partner, we have also secured the most critical part of the financing."
Ingvar Gardarsson, Chairman of the Board of Varmaorka ehf.
"We look forward to working together with Varmaorka to build up Heat Power operators in Iceland. With Climeon's innovative solution to produce energy from low temperature waters, the potential for expansion is large. Even with the relatively low electricity price in Iceland it is a sound investment."
Magnus Brandberg, Partner at Baseload Capital Sweden AB
"The collaboration with Varmaorka is exceeding our expectations. The first power plant with the first customer is already on its' way and we have a strong pipeline of customers for the consecutive power plants. The way the Varmaorka team has structured the business serves as a great example of how to globally deploy distributed power from low temperature geothermal heat."
Thomas Öström, CEO and Founder of Climeon AB
Iceland's geothermal energy potential is vast and for many years it's been used primarily to heat households. But most of the power production is centralized and the transmission of electricity requires investments while also incurring energy losses. Furthermore, due to the easily accessible energy, mainly through hydro powered facilities and geothermal technology, Iceland has one of the world's lowest electricity prices. Despite the low electricity prices, Climeon's solution creates an attractive investment, which proves the global potential for geothermal heat power.
The modules will be distributed across 10 to 15 individual sites and installed over a period of 30 months. The total installation, providing 15 MW of electricity, is enough to power 25,000 Icelandic households.
This press release contains such information that Climeon AB (publ) is required to publish in accordance with the EU Market Abuse Regulation. The information was published for public disclosure on February 23, 2018, at 08:00 CET through the agency of the contact persons set out above.
For additional information, please contact:
Thomas Öström, CEO, Climeon
+46 708 94 96 05
Christoffer Andersson, COO, Climeon
+46 762 00 72 99
Varmaorka is an Icelandic project developer that focuses on harnessing geothermal resources in areas where heat temperatures are approximately 100° C.
Varmaorka develops, finances, constructs and operates small scale geothermal facilities in Iceland. The company's first facilities, with a total capacity of 1 MW, will commence operations in 2018 and plans are underway to add up to 15 MW in phases.
Varmaorka is a subsidiary of CP Energy Holding.
Climeon is a Swedish cleantech equipment vendor and world leader in converting low temperature heat into clean electricity. The company was founded in 2011 and is headquartered in Stockholm with customers in many parts of the world. Climeon was founded to deliver an economically viable business case when it comes to converting low temperature heat into electricity. Climeon was built with the ambition to deliver a good business case for utilizing waste heat with a positive environmental impact.
Climeon is listed on Swedish Nasdaq First North Premier. FNCA Sweden AB is appointed Certified Adviser.