ATOME Energy (ATOM:AIM) is generating excitement after it attracted US energy services heavyweight Baker Hughes (BKR:NASDAQ) as a strategic investor.

On 22 May it was revealed Baker Hughes is investing £2.4 million to take a 6.6% holding in the company at a 3.2% premium to the previous market close. The company also has the right of first offer to supply equipment to ATOME, although it has no exclusivity and must offer a competitive rate.

ATOME CEO Olivier Muscat tells Shares it is possible the agreement could be the precursor to a deeper partnership involving other projects.

Longspur Research analyst Adam Forsyth says: ‘As with all such strategic stakes the information content of the investment is key, signalling a positive appraisal of the company from an industry insider.’

ATOME was formed for the purpose of producing, marketing and distributing green hydrogen and ammonia (for fertiliser). Green hydrogen and ammonia (made through renewable energy) is expected to be a fast-growing market. The company has projects in Paraguay, Iceland and Costa Rica of which Villeta in Paraguay is the most advanced.

Alongside the Baker Hughes news, the company has announced plans to develop its ammonia into a finished product before sale which Muscat says should generate higher returns. A final investment decision is expected on Villeta later this year with production following around two years later.