Shares of Ram Power (TSX:RPG) stock rose more than 34 per cent Thursday after the Nicaraguan Ministry of Energy and Mines approved a power sales tariff increase of 17 per cent.
The increase, which relates to Ram’s geothermal energy plant project in San Jacinto, became effective on October 1.
Shares soared 36.84 per cent to 26 cents each on the Toronto Stock Exchange on Thursday in afternoon trade.
Ram Power, a renewable energy company headquartered in Nevada, said the increase allows the company to recover unexpected project costs linked to both development and plant construction.
On June 7, the renewable energy company said the new tariff would increase annual revenue by $8 to $11 million, once it completed a 72 megawatt expansion.
The new tariff is comparable with current tariff rates of other renewable energy producers in Nicaragua, the company said.
In a statement, chief executive, Shuman Moore, said: “The increase to the power sales tariff has a direct benefit to the long term financial stability of the company.”
He also noted it is in the best interests of Nicaragua and continues the company’s focus toward increasing shareholder value.