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KIBO ENERGY PLC - Placing to Raise a minimum 1.5 Million and Project Status Update

Release Date: 09/10/2019 17:00
Code(s): KBO     PDF:  
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Placing to Raise a minimum £ 1.5 Million
and Project Status Update

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: 09 October 2019

                             Kibo Energy PLC (‘Kibo’ or the ‘Company’)
                              Placing to Raise a minimum £ 1.5 Million
                                      & Project Status Update

Kibo Energy PLC, the multi-asset, Africa focused, energy company, is pleased to announce that it will
be seeking to raise a minimum of GBP1,500,000 (the ‘Placing’), of which GBP1,000,000 (the
‘Underwritten Placing’) is fully underwritten by TS Capital Limited (‘Underwriter’) on behalf of TS
Capital Clients, at a price of 0.45 pence per share. The proceeds from the Placing will be utilized
primarily to further develop the Company’s diverse energy portfolio, on which a status update is
provided below, and working capital requirements.

        *Underwritten Placing for GBP1,000,000;
        *Confirmed GBP500,000 participation in the Placing by Directors, Management and arranged
         parties in addition to GBP1,000,000 Underwritten Placing;
        *Total project portfolio of 1,055 MW power generation capacity with 355 MW already covered
         under Heads of Terms (‘HoT’) Power Purchase Agreements (‘PPA’) with the balance in
         advanced negotiations with potential private and utility off-takers;
        *Kibo to ultimately transition 100% of its energy generation capacity to sustainable and
         affordable renewable energy generation.

Louis Coetzee, CEO of Kibo, commented, “2018 was transformational for the Company, as we
repositioned Kibo to become a significant energy solutions provider in Africa and beyond, by
implementing a strategy focussed on providing innovative energy solutions that will:

        *Guarantee long term sustainability and affordability in electricity supply;
        *Act as key catalyst for socio-economic development priorities in the various project
         jurisdictions; and
        *Give priority to implement energy solutions and strategies that will ensure the lowest possible
         environmental impact.

To enable and execute this strategy, within the space of 18 months, we built a well-diversified portfolio,
and concurrently developed it to bankable feasibility level, except for the MCIPP, which is at feasibility
level. Our project portfolio therefore not only provides Kibo with the ideal platform from where it can
execute its corporate strategy but is also strategic in materially mitigating its country and project risk,
whilst taking full advantage of the lucrative commercial opportunities they presented in a fast-growing
African energy sector.

2019 in turn delivered the first key successes towards the execution of our corporate strategy; the first
HoT power purchase agreements and HoT definitive coal supply agreements across various projects
were entered into and others are in an advanced stage of negotiation.

“We are therefore very pleased to have secured a fully underwritten Placing that also enjoys significant
participation by the Kibo Directors and Management. We view this as a strong vote of confidence in
the Company’s value proposition, strategy and ability to realise this value to its full extent.”

Placing and Underwriting

Kibo will be seeking to raise minimum cash proceeds of GBP1,500,000, with the Underwriter
subscribing for up to GBP1,000,000 of placing shares that are not taken up by third party investors on
completion of the Placing expected to be on or around 16 October 2019.

In addition:
        *The Company has a firm commitment from Directors and Management and other parties
         arranged by them including Sanderson Capital Partners Ltd (“Sanderson”), to participate in the
         Placing for GBP500,000 in addition to the Underwritten Placing (‘the Subscription’); and
        *Shares issued in the Placing (“Placing Shares”) will have warrants attached (together with the
         Placing Shares, “Units”) with each Unit comprising one Placing Share, one warrant exercisable
         at 0.8p per share for the period of 18 months from the date of issue and half a warrant
         exercisable at 1p per share for the period of 36 months from the date of issue.
Details of the shares purchased by Directors and Management are as follows:

NAME                     TITLE           PRICE          NUMBER OF           SHARES HELD          % HOLDING
                                          PER             SHARES               AFTER                POST
                                         SHARE          PURCHASED            PURCHASE            PURCHASE

Christian                Non-
Schaffalitzky (&         Executive        0.45p           3,885,000               6,004,842          0.53%
related parties)         Chairman

Louis Coetzee (&
                         CEO              0.45p           11,440,000           19,505,996            1.71%
related parties)

Tinus Maree                               0.45p           4,485,600               7,419,800          0.65%

Andrew Lianos (&         Executive
                                          0.45p           9,485,000            17,073,633            1.50%
related parties)         Financial

Noel O’Keeffe (&
                         Technical        0.45p           3,445,600               7,037,047          0.62%
related parties)
                         Director &

Wenzel Kerremans         Executive        0.45p            815,000                1,191,241          0.10%

Louis Scheepers          COO              0.45p           7,380,600            10,390,514            0.91%

Pieter Krugel            CFO              0.45p           12,330,000           12,330,000            1.08%

    Note: Percentage holding post purchase in the table above assumes GBP1,500,000 is raised at 0.45
    pence per share.
    The Directors and Management of the Company shown in the above table are Persons Discharging
    Managerial Responsibility (“PDMRs”) under the Market Abuse Regulation 2016 (“MAR”). In
    compliance with MAR and the Company’s Share Dealing Code they have submitted dealing request
    forms to the designated Company executives seeking permission to participate in the Placing and
    authority has been granted. Dealing notification form will be completed by the PDMRs and submitted
    to the FCA within 3 days of completion of the Placing in accordance with MAR.

Sanderson have agreed to subscribe for 55,555,556 Placing Shares, pursuant to the Placing. Sanderson
is a related party of the Company for the purposes of the AIM Rules by virtue of their status as a
substantial shareholder, holding 10% or more of the existing Ordinary Shares. The Board of Directors
consider, having consulted with the Company’s nominated adviser, RFC Ambrian Limited, that the
terms of the transaction are fair and reasonable insofar as the Company’s shareholders are concerned.

Kibo Project Status Update

Project Development: Progress
The Company is continuing to make good progress as it develops a diverse portfolio of advanced power
generation and associated mining projects in Sub-Saharan Africa and the UK, in collaboration with
several international blue-chip partners with whom Kibo has established strong working relationships.
These include General Electric, SEPCOIII, Vale Mozambique, Steag Energy Services, ESS Inc and
Statkraft among others. Sovereign risk is significantly and actively mitigated by managing a portfolio
of projects deliberately located in three different African countries.

This diverse project portfolio positions Kibo favourably to serve Africa’s urgent increasing demand for
reliable, sustainable and affordable electricity. Approximately 60% of Africa’s population is without
electricity which includes 620 million people in Sub-Saharan Africa that currently rely on firewood,
kerosene and charcoal for their energy needs with the associated adverse environmental impact of using
these fuel sources. Kibo’s strategy is to develop its African projects with the latest clean coal burning
technologies, since coal remains the only affordable electrical energy source in African developing
economies. At the same time, Kibo recognizes the environmental necessity and benefits of renewable
energy generation and therefore actively seeks opportunities to integrate this technology with the
traditional base load generation solutions in a practical and affordable manner.

Although presenting in a different shape and form, the energy crisis is not limited to Africa only. Three
years ago, engineers forecasted an unprecedented “energy gap” in the UK in a decade’s time, with
demand for electricity likely to outstrip supply by more than 40%, which could lead to blackouts. Kibo
identified this as an ideal opportunity which compliments its strategy and hence Kibo’s participation in
the MAST Energy Developments projects which is expected to start providing Flex Power (dispatchable
power) into the UK grid from early 2020.

As an example of its commitment to sustainable and affordable clean electricity generation and the
Company’s objective to ultimately transition 100% of the company’s total energy portfolio to renewable
power generation, the Company has recently partnered with ESS, a US company which has developed
iron flow battery technology that offers more than double the operating lifetime and cycle capacity of
lithium-ion battery storage systems, with a non-flammable chemistry and minimal maintenance
requirements. ESS is currently producing batteries with this technology to help utilities defer major
capital expenditures on distribution equipment by storing energy during times of lower demand or
excess supply and releasing energy when demand peaks. These innovative energy storage systems can
enhance the availability of fossil fuel generation plants, shifting to a more sustainable model over time
and Kibo is working closely with ESS to utilize the proven benefits of these storage systems in its coal
fired power plants. Further detail on the Company’s transition strategy to 100% renewable generation
will be provided in due course.

Kibo’s project portfolio comprises of a portfolio of well-advanced, innovative projects as illustrated


         Benga Power Plant Project, Mozambique (65% interest) – This project is Kibo’s first pure
         energy project, which is supported by both its Joint Venture partner, a local energy company
         Termoeléctrica de Benga S.A., and the Government. The Company recently delivered a DFS
         and subsequently signed term sheets for coal supply and power purchase agreements with Vale
         Mozambique, S.A., and continues encouraging discussions with Electricidade de Moçambique
         (‘EDM’) under the existing MoU as part of the PPA process.


                -Mabesekwa Coal Independent Power Project, Botswana (85% interest) – this
                 integrated Project comprises 300-600 MW coal fired power plant and is currently at
                 definitive feasibility stage. The Project has a clear development path ahead, with
                 achievable short-term deliverables.
                -KP1 – a bespoke 300MW power station, envisaged to provide power to a
                 Petrochemical plant (‘PCP’) which will provide first Botswana, with up to 80% of its
                 domestic liquid / gas fuel requirements, and later the Southern African market at large.
                 (See RNS dated 25 September 2019)
                -Kibo Energy Botswana – that owns a coal resource of 761 million tonnes with the
                 following coal supply arrangements (See RNS dated 25 September 2019):
                      -Supply of approximately 4.5 million tonnes p/a to PCP for which a binding Coal
                       Supply Agreement already exists;
                      -Supply of approximately 1.5 million tonnes p/a to KP1 to satisfy 100% of its fuel
                       needs; and
                      -Supply of approximately 1.5 million tonnes p/a to the MCIPP Power Station to
                       satisfy 100% of its fuel needs.

         Mbeya Coal to Power Project (MCPP), Tanzania (100% interest) – a project fully developed to
         construction ready status, comprising of a 39 MT mineable reserve and a 300-600 MW power
         plant is making headway and remains an exciting opportunity as highlighted by the recent
         confirmation from TANESCO that Kibo has the option to develop the project for the severely
         undersupplied power export market. Kibo is actively pursuing the export market alongside
         opportunities within the domestic market. Recently, the Company was granted seven Mining
         Licences and the Project’s Water Permits was successfully renewed, showing continued
         dedicated work, progress and development on the MCPP.

        *United Kingdom:

        Mast Energy Development Ltd, UK (60% interest) – this company is looking to support the
        UK energy mix with much needed flexible energy projects by developing a portfolio of small-
        scale power generation assets. To this end, one site has already been acquired and due diligence
        on several others are nearing conclusion. Notably, Kibo has a direct 100% interest in the
        shovel-ready reserve power generation project, Bordersley Power Limited, which is expected
        to commence commercial production towards the end of Q1 2020. With a PPA now in place
        with Statkraft, the Company anticipates that revenues from this project will contribute
        significantly to ongoing Kibo Group funding requirements.


This announcement contains inside information as stipulated under the Market Abuse Regulations (EU)
no. 596/2014.

For further information please visit or contact:

   Louis Coetzee            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
   Isabel de Salis /                                                              Investor and Media
                          +44 (0) 20 7236 1177      St Brides Partners Ltd
   Beth Melluish                                                                  Relations Adviser

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.

09 October 2019
Corporate and Designated Adviser
River Group

Date: 09/10/2019 05:00:00
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