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KIBO ENERGY PLC - Update re Reorganisation of Botswana Interests

Release Date: 06/12/2019 09:00
Code(s): KBO     PDF:  
 
Wrap Text
Update re Reorganisation of Botswana Interests

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: 6 December 2019

                           Kibo Energy PLC (‘Kibo’ or the ‘Company’)
                          Update re Reorganisation of Botswana Interests

Kibo Energy PLC, the multi-asset, Africa focused, energy company, is pleased to announce an update
regarding its agreement with Shumba Energy Ltd (‘Shumba’) that significantly repositions its interests
in Botswana, namely the Mabesekwa Coal Independent Power Project (“MCIPP”) and associated coal
asset (see announcement dated 25 September 2019).


Overview
          *Signed first of a series of agreements to implement the Heads of Agreement (‘HoA’) with
           Shumba to reorganise the arrangements for the MCIPP and its associated coal asset in
           Botswana
          *Shareholder Agreement signed in respect of restructuring Kibo Energy Botswana (Pty) Ltd
           (‘KEB’), providing Kibo with a 35% interest in KEB, which holds a total 761Mt coal resource
           and has three large customers
          *Signed Shareholder Agreement concludes restructuring of first Botswana subsidiary
           company, Kibo Energy LTD (Botswana)
          *Remaining agreements on track to be completed by 20 March 2020 in which Kibo will also
           hold:
                  -85% interest in an energy project, which is to be called KP2
                  -35-40% interest in a new 300MW energy project, KP1, that will exclusively provide
                   a new petrochemical plant with energy
          *Agreement gives Kibo access to a revenue stream from an estimated annual coal production
           of 7.5Mt coal p/a


Louis Coetzee, CEO of Kibo, commented, “We are delighted with the progress being made as we
advance the restructuring of our interests in Botswana to significantly lower development and execution
risk. Being part of several much larger projects naturally provides many benefits and advantages to
the Company and its shareholders. Not least because, having finalised the shareholder agreement
today, we’ll be holding a 35% interest in an enlarged project with a total 761Mt coal resource that
already has three large customers, whereas before we had one. We also continue to hold an 85%
interest in the energy project, which is to be called KP2 and in addition, a 35-40% interest in a new
300MW energy project, KP1, a bespoke 300MW power plant that will exclusively provide a new
petrochemical plant with energy, where the costs of feasibility / technical studies are to be funded by
Shumba.
“We can now fully leverage our coal resource at Mabesekwa by providing and fast-tracking three
different revenue streams, which 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. As I mentioned in past announcements, there is no funding impact in addition to
what Kibo currently has for the development of the MCIPP power plant other than we may have to
nominally increase our operational capacity to meet the additional operational / management demands
for the development of two 300MW power plants. This is a real opportunity for a shorter and faster
route to revenue generation; we look forward to updating shareholders on further progress soon.”


Background & Details
In September 2019, Kibo and Shumba signed a binding Heads of Agreement (‘HoA’) with Shumba and
various subsidiaries of each party (‘the Parties’) to reorganise the arrangements for the MCIPP and its
associated coal asset in Botswana.


The reorganisation sees the MCIPP Retained Assets consolidated into Kibo Energy Botswana (Pty) Ltd
(‘KEB’); this enlarged project in which Kibo has a 35% interest has a total 761Mt coal resource. An
additional Joint Venture (‘KP2’) between Kibo and Shumba (held 85%/15% respectively) will advance
the existing MCIPP energy projects in Botswana. Additionally, Kibo and Shumba will jointly manage
and oversee the development of a bespoke 300MW power station (the ‘KP1 Power Plant’) through the
incorporation of a new company to be held 35%-40% by Kibo and the balance by Shumba. Shumba
will provide the full development funding requirement for associated feasibility and technical studies.


Notably, the KP1 Power Plant is envisaged to provide 300 MW power to a Petrochemical Plant (‘PCP’),
which will provide Botswana first and then Africa with energy fuels and specialty chemicals. The PCP
is being developed by Coal Petroleum (‘CP’), which is 80% owned by Shumba with other partners
including leading Chinese EPC companies PowerChina International Group Limited and Wison Group.
CP is engaged in advanced discussions with several regional purchasers of fuels and other
petrochemicals in Botswana, South Africa, Namibia and Zambia.


The consolidated MCIPP Resource will supply the PCP, the KP1 Power Plant and the MCIPP power
plant with coal.


Accordingly, a series of agreements are being advanced between the Parties to implement the HoA.
The first key agreement is the Shareholder Agreement in respect of restructuring KEB, which has now
been finalised; this concludes the restructuring of the first Botswana subsidiary company, Kibo Energy
LTD (Botswana). The remaining agreements are on track to be completed by 20 March 2020.
                                             **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
  6 December 2019
  Corporate and Designated Adviser
  River Group

Date: 06-12-2019 09:00:00
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