Wrap Text
Bordersley Project: Notifications of Prequalification Decisions for the capacity market
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: 31 October 2019
Kibo Energy PLC (‘Kibo’ or the ‘Company’)
Bordersley Project: Notifications of Prequalification Decisions for the capacity market
Kibo Energy PLC, the multi-asset, Africa focused, energy company, is pleased to announce an update
on its 60% owned subsidiary, MAST Energy Developments Limited (‘MED’), a private UK registered
company targeting the development and operation of flexible power plants to service the UK reserve
power generation market. MED is developing a portfolio of reserve power generation projects and
Bordesley Power Limited (‘Bordesley’) is the first shovel-ready project site in the portfolio.
Highlights
* Reinstatement of the Capacity Market scheme by the department of Business, Energy and
Industrial Strategy, following the European Commission’s decision that the GB Capacity Market
scheme is compatible with EU State aid rules and thereby amongst others enables the UK to
make capacity payments under the GB Capacity Market.
* Bordersley has conditionally prequalified for the 2022 three years ahead (T-3) Capacity
Market Auction.
* Bordersley has conditionally prequalified for the 2023 four year ahead (T-4) Capacity Market
Auction.
* This conditional prequalification and potential subsequent qualification will give the right to
Bordersley to participate in the auction to win a 15-year capacity market contract.
Louis Coetzee, CEO of Kibo Energy, commented, “Part of the UK government’s Electricity Market
Reform package, the Capacity Market aims to ensure security of electricity supply by providing a
payment for reliable sources of capacity, such as Bordersley, alongside their electricity revenues, to
ensure they deliver energy when needed. This will encourage the investment required by the UK
Government to replace older power stations and provide backup for more intermittent and inflexible low
carbon generation sources.
The reinstatement of the Capacity Market scheme is recognition by the EU and UK government that
there is a need to ensure security of electricity supplies in the UK. It means that the economics of flexible
generation sites such as Bordesley improve, as it facilitates a steady payment for the duration of the
capacity agreement (ranging between 1 and 15 years) to successful bidders, and I am delighted that
Bordesley has prequalified for the auction. According to the research by Aurora Energy Research, CM
prices should recover as lucrative site-specific benefits for peakers and DSR become more scarce; CM
is expected to clear in mid £20s/kW in the 2020s, but the buildout of nuclear, wind and interconnectors
are key uncertainties”
What is the Capacity Market?
The Capacity Market was proposed following the Government’s comprehensive review of the electricity
market. The objective of the Capacity Market is to achieve long-term security of supply.
Set out in the UK Energy Act 2013, the Capacity Market (CM) is one of the UK government initatives
for ensuring security of electrical energy supply for homes, businesses and industry. The CM not only
secures additional electricity supply for use during grid stress events – which is increasingly important
as energy demand increases, and the UK moves to more intermittent, less flexible renewable generation
– but also creates an opportunity for those with generation capacity to earn additional income.
The Capacity Market is a mechanism introduced by the UK Government to ensure that electricity supply
continues to meet demand as more volatile and unpredictable renewable generation plants come on
stream. Commencing in 2018, it aims to ensure that sufficient generation or load-management capacity
exist in the system to cope with times of stress on the network when, for example, the wind stops blowing
or there is a surge in demand. Along with Contracts for Difference, Carbon Price Floor and Electricity
Demand Reduction, it aims to reform the UK electricity market to deliver low-carbon energy and reliable
supply, while minimising the cost to consumers. The Capacity Market will operate alongside the current
Energy Market, supported by the Balancing Services Market. As more intermittent renewable generation
technologies come on stream, the Capacity Market will provide back-up generators and demand-side
responders to help balance the network at times of stress. Participants will be paid a per MW rate for the
capacity they offer to the market. This capacity needs to be available when providers are called upon by
National Grid at any time during the contracted period.
Advantages to Bordersley for participation in the Capacity Market
During the generation delivery year, generators with Capacity Agreements receive monthly payments
for their agreed obligation at the auction Clearing Price. There are no financial losses for not being able
to deliver the pledged capacity. If generators do not engage their capacity when required they will be
penalised at no more than 100% of the CM payment, therefore the financial benefits available to
generators through participation are significant. Participation in the CM is a long-term arrangement and
part of the UK government’s Electricity Market Reform package.
**ENDS**
For further information please visit www.kibo.energy or contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive Officer
Corporate and Designated
Andreas Lianos +27 (0) 83 4408365 River Group
Adviser on JSE
Jason Robertson +44 (0) 20 7374 2212 First Equity Limited Joint Broker
Bhavesh Patel/Stephen
+44 20 3440 6800 RFC Ambrian Limited NOMAD on AIM
Allen
Isabel de Salis / Investor and Media
+44 (0) 20 7236 1177 St Brides Partners Ltd
Beth Melluish Relations Adviser
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
31 October 2019
Corporate and Designated Adviser
River Group
Date: 31/10/2019 12:35:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
