HIVE Digital Applied sciences Ltd. (HIVE) broadcasts that, pursuant to its press launch dated July 22, 2024, it has entered into definitive agreements (βagreements“) to develop 100 megawatt (“MW”) digital asset mining in Paraguay. The contracts encompass: (i) a share buy settlement (hereinafter known as “SPA“) between Paraguay Digital Ltd. (“HIV Paraguay“), an entirely owned subsidiary of the Firm, and the house owners of W3X SA (“W3X” or “goal“); and (ii) the development contract (hereinafter known as “Development contract“) between the newly acquired firm W3X SA (“W3X“), and an skilled native contractor (or “Provider“) (all quantities in US {dollars} except in any other case acknowledged).
Aydin Kilic, President and CEO of HIVE, mentioned: “We’re proud to announce the acquisition of a 100 MW PPA in Paraguay, utilizing inexperienced and clear power coming from the Itaipu hydroelectric dam. Our staff is difficult at work designing and beginning development of one other 6 .5 exahash per second (EH/s) of Bitcoin mining infrastructure, bringing our world EH/s to 12.1 EH/s.β Nonetheless, we restricted our funding to 100MW after rejecting one other 150MW on account of sudden modifications in fiscal coverage. Like many different public miners, we’ll discover different nations that supply steady capital for key electrical infrastructure, knowledge facilities for the worldwide digital economic system, US foreign money income and clear fiscal agreements.
Frank Holmes, Government Chairman of HIVE, mentioned: “Steady fiscal coverage is vital to attracting and sustaining continued overseas direct funding from public corporations and US institutional traders. We’ll proceed to advertise honest therapy of the information middle and bitcoin mining business, as we’ve got achieved in Canada , the US and Sweden knowledge facilities in Paraguay act as foreign money hedges by bringing the government-owned firm tens of millions of steady revenue in US {dollars} per 30 days a multifaceted, long-term imaginative and prescient for his or her shareholders and contributing to regional development and improvement, offering significant employment alternatives, governance, transparency and assist the training and obligatory improvement of information middle abilities for the worldwide digital economic system.”
Strategic funding plans for Paraguay
HIVE clarifies its strategic funding plans for Paraguay in response to a latest proposal to impose a discriminatory 14% enhance within the power tariff for Bitcoin knowledge facilities.
Mr. Holmes continued: “Whereas we’re excited concerning the alternatives in Paraguay, the proposed enhance in power tariffs creates uncertainties that have an effect on our long-term funding choices. We’ve raised our issues with the federal government and sit up for continued discussions to deal with these challenges. Steady prices and dependable length agreements are important to draw overseas public funds.We hope that the federal government will handle these insurance policies to make sure continued funding.
After constructive conferences with key Paraguayan officers in Could, HIVE initially deliberate extra overseas direct funding (FDI), together with land acquisition and PPA negotiations for 2 potential initiatives of 100 MW and one other of fifty 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% enhance within the power tariff, mixed with quick contract durations and uncertainty about power costs, led to a discount in our funding and a delay in our HPC knowledge middle technique with our Nvidia GPU chipset. the necessity to take part within the AI ββgrowth.
The 100 MW mission wants to draw important overseas direct funding to Paraguay and supply seed capital to transform high-voltage electrical energy into usable power for manufacturing and households. Electrical energy funds from HIVE would offer a steady US greenback advantage of over $100 million over three years and provide a dependable month-to-month revenue along with serving to construct electrical energy infrastructure. This offers an artificial hedge of the US greenback that banks can not match. Moreover, the price of {the electrical} infrastructure required to part out excessive voltage energy for industrial and residential use is estimated to be round US$16 million creating native jobs. Right this moment our native contractor mentioned that we are going to quickly mobilize about 80 development employees for the preliminary work.
The Paraguayan guarani has depreciated roughly 36% towards the US greenback over the previous 5 years and roughly 16% over the previous yr, underscoring the significance of steady overseas funding and revenue in US {dollars} to Paraguay's financial stability and development.
Mr. Holmes, as world monetary supervisor, highlighted: “Analysis helps the truth that elevated electrical energy infrastructure drives sooner financial development. Research by the World Financial institution and IEA emphasize that funding in electrical energy infrastructure is important for financial improvement, elevated productiveness, industrial development, and high quality of life. “
HIVE just isn’t alone in its cautious method. Different public bitcoin mining corporations gathered on the greatest bitcoin convention in Nashville final week and mentioned they had been equally reconsidering their funding plans in Paraguay on account of proposed tariff will increase and contract restrictions. This collective response to a convention in Nashville the place former President Trump and Robert F. Kennedy Jr. each promoted the significance of bitcoin and bitcoin mining of their political marketing campaign forward of the US presidential election this yr, solely illustrating the necessity for a steady authorities fiscal coverage. entice and retain main overseas capital funding from public mining corporations and institutional funds.
HIVE's method primarily based on a clear “Return on Invested Capital” (ROIC) mannequin helps sustainable funding and group involvement, as evidenced by our profitable operations in Sweden and Canada. We worth the chance to contribute to Paraguay's financial development and stay dedicated to selling a good setting for enterprise and funding.
