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HIVE Digital Applied sciences Ltd. (HIVE) broadcasts that, additional to its information launch of July 22, 2024, it has entered into definitive agreements (the “Agreements“) for the event of a 100 megawatt (“MW”) digital asset mining operation in Paraguay. The Agreements are composed of: (i) a share buy settlement (the “SPA“) amongst Paraguay Digital Ltd. (“HIVE Paraguay“), a wholly-owned subsidiary of the Firm, and the homeowners of W3X SA (“W3X” or the “Goal“); and (ii) a building settlement (the “Building Settlement“) among the many newly acquired Firm, W3X SA (“W3X“), and an skilled native contractor (or the “Contractor“) (all quantities in US {dollars}, except in any other case indicated).
Aydin Kilic, President and CEO of HIVE, said: “We’re proud to announce the acquisition of a 100 MW PPA in Paraguay, using inexperienced and clear power sourced from the Itaipu hydroelectric dam. Our staff is tough at work to design and start constructing an extra 6.5 Exahash per second (EH/s) Bitcoin mining infrastructure, growing our world EH/s to 12.1 EH/s.” Nonetheless, we’ve capped our funding at 100 MW after turning down an extra 150 MW as a result of surprising fiscal coverage adjustments. Like many different public miners, we’ll discover different nations that provide secure capital for key electrical infrastructure, knowledge facilities for the worldwide digital economic system, U.S. foreign money revenue, and clear fiscal agreements.
Frank Holmes, Government Chairman of HIVE, said: “Steady fiscal insurance policies are essential in attracting and sustaining continued overseas direct funding from public firms and U.S. institutional traders. We’ll proceed to advocate for truthful remedy for the info middle and Bitcoin mining industries, as we’ve been doing throughout Canada, the US, and Sweden. Knowledge facilities in Paraguay act as a foreign money hedge by bringing the government-owned utility hundreds of thousands of secure U.S. greenback income month-to-month. When they’re public firms and institutional funds, they’ve a multifaceted, long-term imaginative and prescient for each their shareholders and to contribute to regional progress and improvement, offering significant employment alternatives, governance, transparency, and fostering schooling and wanted knowledge middle ability improvement for the worldwide digital economic system.”
Strategic Funding Plans for Paraguay
HIVE clarifies its strategic funding plans for Paraguay in response to the latest proposal to impose a discriminatory 14% power tariff enhance on Bitcoin knowledge facilities.
Mr. Holmes continued, “Whereas we’re excited in regards to the alternatives in Paraguay, the proposed power tariff hike creates uncertainties that impression our long-term funding selections. We’ve got communicated our considerations with the federal government and look ahead to ongoing discussions to handle these challenges. Steady prices and dependable settlement durations are important to draw overseas public funds. We hope the Authorities will deal with these insurance policies to make sure continued funding.”
After constructive conferences with key Paraguayan officers in Might, HIVE initially deliberate bigger overseas direct investments (FDI), together with buying land and negotiating PPAs for 2 potential tasks of 100 MW every and one other for 50 MW. This funding was anticipated to exceed $250 million, reflecting HIVE’s confidence in Paraguay’s imaginative and prescient and management. Nonetheless, the proposed 14% power tariff enhance, mixed with short-term contract durations and a scarcity of readability on power pricing, has led to a discount in our funding and a delay in our HPC knowledge middle technique with our suite of Nvidia GPU chips wanted to take part within the AI increase.
A 100 MW undertaking wants to draw substantial Overseas Direct Funding into Paraguay and supply important capital to transform high-voltage electrical energy into usable energy for manufacturing and households. Electrical energy funds from HIVE would offer a secure U.S. greenback profit exceeding $100 million over three years, providing dependable month-to-month revenue along with aiding in constructing out the electrical energy infrastructure. This supplies an artificial U.S. greenback hedge that banks could not match. Additional, the price of the required electrical infrastructure for stepping down from excessive voltage energy for industrial and residential use is estimated to be round $16 million creating native jobs. As we speak, our native contractor mentioned we’ll quickly be mobilizing round 80 building employees for the preliminary work.
The Paraguayan guaraní has depreciated roughly 36% in opposition to the U.S. greenback over the previous 5 years and about 16% prior to now yr, supporting the significance of secure overseas investments and U.S. Greenback revenue for Paraguay’s financial stability and progress.
Mr. Holmes highlighted as a world cash supervisor: “Analysis helps the truth that elevated electrical infrastructure drives sooner financial progress. Research by the World Financial institution and the IEA emphasize that investments in electrical energy infrastructure are essential for financial improvement, enhancing productiveness, industrial progress, and high quality of life.”
HIVE isn’t alone in its cautious strategy. Different public Bitcoin mining firms gathered on the largest Bitcoin convention final week in Nashville and mentioned they’re equally reassessing their funding plans in Paraguay as a result of proposed tariff enhance and contract constraints. This collective response on the convention in Nashville, the place former President Trump and Robert F. Kennedy Jr. each endorsed the significance of Bitcoin and Bitcoin mining of their political marketing campaign for the US Presidential election this yr, solely illustrates the necessity for secure authorities fiscal insurance policies to draw and maintain essential overseas capital investments from public mining firms and institutional funds.
HIVE’s strategy, primarily based on a clear ‘Return on Invested Capital’ (ROIC) mannequin, helps sustainable funding and neighborhood engagement, as evidenced by our profitable operations in Sweden and Canada. We worth the chance to contribute to Paraguay’s financial progress and stay dedicated to fostering a conducive surroundings for enterprise and funding.