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Brazil Potash Signs Non-Binding MOU for Proposed 28-Year BOOT Power Contract in Amazonas

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Announcement Summary

Brazil Potash (NYSE-American: GRO) announced a non-binding MOU with Gera Center for an energy contract using the BOOT model.

  • The MOU covers a modular diesel plant with maximum capacity of 20 MW, supplying primary power during construction of two mine shafts.
  • After operations begin, it is to provide emergency backup for 23 years if the 500 kV line to the SIN is interrupted; availability must be at least 98%.
  • Gera Center will supply, install, operate and maintain 63 containerized modular diesel generator sets, scaling from 10 MW to 20 MW during the first year.
  • The BOOT structure transfers approximately US$ 33 million in investment to operating costs over 28 years, with about US$ 10 million in estimated savings versus the Pre-Feasibility Study.
  • First power may occur within 120 days after definitive-contract signing; critical incidents have a maximum two-hour response time, and infrastructure transfers to Brazil Potash at contract end.
  • The MOU is non-binding; the parties will work toward definitive contracts, but Brazil Potash says signing and completion on current terms are not guaranteed.

Brazil Potash selected Gera Center through a competitive process involving 12 companies; 8 submitted formal proposals and 4 reached final evaluation.

Investor FAQs

Brazil Potash (NYSE-American: GRO) has announced a non-binding memorandum of understanding (MOU) with Gera Center for a proposed 28-year Build, Own, Operate and Transfer (BOOT) energy contract for the Potássio Autazes Project in Amazonas. The MOU does not guarantee that definitive contracts will be signed or that the transaction will be completed on the terms currently contemplated.
The proposed arrangement covers a modular diesel generation plant with a maximum capacity of 20 MW. It would provide the main power supply during construction of two mine shafts and would subsequently serve as an emergency backup system for the first 23 years of mine operations, because conventional grid power is not available at the site during the implementation phase.
Gera Center would be responsible for supplying, installing, operating and maintaining 63 containerised modular diesel generator sets. The system would be deployed in stages, starting at 10 MW and reaching 20 MW during the first year. During the backup phase, the proposed contract includes minimum operational availability of 98% and a maximum response time of two hours for critical incidents.
The first power supply could occur within 120 days after signature of the definitive contract. The company expects the system to be fully installed and supplying the main construction power within the 120-day mobilisation window after the definitive contracts are signed. At the end of the proposed 28-year contract, the generation infrastructure would be transferred to Brazil Potash.
According to Brazil Potash, the BOOT structure would transfer approximately US$ 33 million of initial power-generation investment from the project's construction budget to operating costs spread over 28 years. The company also estimates net savings of about US$ 10 million over the life of the contract compared with the figures in the project's Pre-Feasibility Study. These are company estimates, and the arrangement remains subject to definitive contracts.
Brazil Potash says the selection followed a formal competitive process involving 12 companies with experience in the Amazon region. Of those, 8 submitted formal proposals and 4 reached the final evaluation stage. Brazil Potash says Gera Center received the highest technical and commercial evaluation over the proposed 28-year contractual period.
The MOU is expressly non-binding. The parties are expected to work on definitive contracts in the coming months, but Brazil Potash states that there is no guarantee those contracts will be signed or that the transaction will be completed on the terms currently contemplated. The proposed backup system is also intended to support continuity if there is an interruption to the planned 500 kV transmission line connecting the project to the Sistema Interligado Nacional (SIN).

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