TIDMKIBO
Kibo Energy PLC
27 September 2019
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 27 September 2019
Kibo Energy PLC ('Kibo' or the 'Company')
Proactive Investors Interview Q&A
Kibo Energy PLC, the multi-asset, Africa focused, energy
company, is pleased to release this Q&A, which summarises
Proactive Investors' interview with Kibo CEO Louis Coetzee
regarding the reorganisation of the Company's Botswanan Mabesekwa
Coal Independent Power Project ('MCIPP') announced on 25 September
2019.
Could you explain the reorganization of the MCIPP, announced on
25 September 2019?
The Company has an 85% interest in a 303 million tonne ('Mt')
coal resource in Botswana. On completion of the agreement, it will
hold a 35-40% interest in an enlarged project with a total 761Mt
coal resource that has three large customers, whereas before we had
one (ourselves). We also continue to hold an 85% interest in the
energy project (currently referred to as the MCIPP), which is to be
called KP2 and in addition, a 35-40% interest in a new 300MW energy
project, KP1, that will exclusively provide a new petrochemical
plant with energy; where the costs of feasibility / technical
studies are to be funded by Shumba. (Please access the following
link for further explanation on MCIPP reorganization:
http://kibo.energy/wp-content/uploads/Mabasekwa-reorganization-Final-V3.3.pdf)
Could you provide a bit more background to the deal?
Shumba recently acquired 80% of Coal Petroleum ('CP'), which is
developing a petrochemical plant that will provide first Botswana
with up to 80% of its domestic liquid / gas fuel requirements, and
later the Southern African market at large. CP is a company that
has been focused on the development of a commercial scale liquid
fuels production facility in Botswana. CP has partnered with
PowerChina International Group Limited and Wison Group, both
leading Chinese EPC companies with proven track records and recent
experience in the coal-based power and CTL technologies for the
execution of the Bankable Feasibility Study ('BFS'). The technical
aspects of a BFS for the petrochemical plant to be built at
Mabesekwa, will be undertaken in conjunction with the two Chinese
conglomerates and is nearing completion, with project financing
discussions advanced.
This plant will require a dedicated supply of 250-300MW
electricity and to this end, Shumba and Kibo will incorporate a
joint venture to oversee the design, development, construction,
commissioning, and operation of a power station dedicated to
powering it. Accordingly, a power purchase agreement will be put in
place regarding 100% of the electricity required to power the plant
over its life.
Why have you consolidated the coal resources?
We are consolidating our coal assets to create a 761Mt resource
to take advantage of three significant revenue streams that are
planned to come from the consolidated Mabesekwa coal resource.
Shumba already has a binding Coal Supply Agreement to guarantee
supply of all the feedstock that would be required for the life of
the petrochemical plant, with binding offtake agreements to follow
in due course for KP1 and KP2.
What three revenue streams are you talking about?
We can now fully leverage our coal resource at Mabesekwa by
providing and fast-tracking three different revenue streams. These
include:
-- KP1, which is the new energy project that will provide energy
to the petrochemical plant and which will require an estimated
1.5Mt of coal p/a;
-- KP2, which is the 85% interest in the MCIPP, which will
require an estimated 1.5Mt of coal p/a; and
-- The petrochemical plant, which will require 4.5Mt p/a.
In summary, this would give Kibo access to a revenue stream from
an estimated annual coal production of 7.5Mt coal p/a. compared to
producing 1.5Mt p/a for its own consumption at the MCIPP power
plant.
What is the net impact from a funding point of view?
There is no funding impact in addition to what Kibo currently
has for the development of the MCIPP power plant. The only
potential impact is that Kibo may have to nominally increase /
expand its operational capacity to meet the additional operational
/ management demands for the development of x2 300MW power plants.
As stated above, the funding for the feasibility / technical
studies for KP1 will come from Shumba.
What is your relationship with Shumba?
The reorganisation demonstrates the fact that our relationship
with Shumba is evolving into a closer and wider commercial
relationship where we are leveraging of each other's strengths, as
strategically envisaged when we first acquired the MCIPP in 2017.
This is underscored by Shumba's willingness to agree to a further
voluntary lock-in period in addition to the initial lock-in.
How does the deal create value for Kibo?
In multiple ways:
-- 100% increase in the power project portfolio for Botswana;
-- Access to a revenue stream based on an estimated 7.5Mt annual coal production;
-- Guaranteed PPA for first 300MW in 600MW portfolio;
-- Significantly lower development and execution risk; and
-- Real opportunity for shorter and faster route to revenue generation.
**ENDS**
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC
Chief Executive Officer
Andreas Lianos +27 (0) 83 4408365 River Group
Corporate and Designated Adviser
on JSE
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Jason Robertson +44 (0) 20 7374 First Equity Ltd
Broker 2212
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Andrew Thomson +61 8 9480 2500 RFC Ambrian Limited
NOMAD on AIM
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Isabel de Salis/Beth Melluish +44 (0)20 7236 St Brides Partners
Investor & Media Relations Adviser 1177 Ltd
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Notes
Kibo Energy PLC is a multi-asset, Africa focused, energy company
positioned to address the acute power deficit, which is one of the
primary impediments to economic development in Sub-Saharan Africa.
To this end, it is the Company's objective to become a leading
independent power producer in the region.
Kibo is simultaneously developing three similar coal-fuelled
power projects: the Mbeya Coal to Power Project ('MCPP') in
Tanzania; the Mabesekwa Coal Independent Power Project ('MCIPP') in
Botswana; and the Benga Independent Power Project ('BIPP') in
Mozambique. By developing these projects in parallel, the Company
intends to leverage considerable economies of scale and timing in
respect of strategic partnerships, procurement, equipment, human
capital, execution capability / capacity and project finance.
Additionally, the Company has a 60% interest in MAST Energy
Developments Limited ('MED'), a private UK registered company
targeting the development and operation of flexible power plants to
service the Reserve Power generation market.
Johannesburg
27 September 2019
Corporate and Designated Adviser
River Group
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END
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