ATOME PLC (LSE:ATOM) has issued a Notice of Dispute and Intent to Submit a Claim for Arbitration in connection with its Villeta Project in Paraguay.
The notice has been served under the bilateral investment treaty between the UK and Paraguay and relates to a dispute concerning the power arrangements for the project.
ATOME alleges that Paraguay breached its obligations by revoking presidential decrees that provided for long-term fixed-price electricity and by withdrawing from a revised power purchase agreement that the company considers necessary for financing the Villeta Project.
ATOME Moves to Terminate 2022 Power Purchase Agreement
ATOME said it had been unable to reach an agreement with Paraguayan state-owned utility ANDE on a standstill arrangement covering its existing power purchase agreement.
The company has consequently moved to terminate the 2022 power purchase agreement, with termination due to take effect at the end of 2026.
ATOME said the decision is intended to avoid potential liabilities under the existing agreement while discussions concerning future power arrangements continue.
Discussions Over New Power Agreement Continue
Despite initiating the dispute process, ATOME said it remains in discussions aimed at securing a new long-term power agreement for the Villeta Project.
The company considers an appropriate long-term electricity supply agreement necessary for the project to proceed and for its financing arrangements.
The arbitration notice represents the formal initiation of a dispute process under the UK-Paraguay Bilateral Investment Treaty. The company has not stated that an arbitration claim has resulted in any finding or determination against Paraguay.
ATOME’s Villeta Project
ATOME is a green energy development company focused on large-scale renewable energy projects, including its Villeta Project in Paraguay.
The company’s development model involves securing long-term power supply arrangements to support the financing and operation of its projects.
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