TIDMKIBO
RNS Number : 3215L
Kibo Energy PLC
05 September 2019
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 011/007371/10) Share code on the
JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 5 September 2019
Kibo Energy PLC ('Kibo' or the 'Company')
Kibo inks Power Purchase & Coal Supply Term Sheets
with Vale Moçambique, S.A for Benga Power Plant Project
Kibo Energy PLC, the multi-asset, Africa focused energy company,
is pleased to announce that is has signed a non-binding Power
Purchase Term Sheet ('PPTS') and a non-binding Coal Supply Term
Sheet ('CSTS') with Vale Mozambique, S.A. ('Vale') for the Benga
Power Plant Project in Mozambique ('BPPP'). Also see the RNS of 7
June 2019 in this regard.
Highlights
-- PPTS signed with Vale for c.37% of the available power
targeted for phase 1 generation at the BPPP
o Agreement highlights the urgent need for a reliable power
source in the region
o Tariff calculation mechanisms typical of Power Purchase
Agreements ('PPAs')
o Definitive PPA with Vale based on the initial terms in the
PPTS targeted for agreement and finalisation during Q4 2019
o Finalised Vale off-take would significantly enhance economic
feasibility and ultimate fundability of the BPPP
-- CSTS signed with Vale for the total coal requirement of the
BPPP over the modelled 25-year life of plant
o Competitive coal price negotiated reflected in competitive
indicative electricity tariff of independent financial model for
BPPP
o Coal source which is essentially co-located with the BPPP
eliminates coal transport and handling cost and provides
considerable operational flexibility
o Definitive Coal Supply Agreement ('CSA') seeking to be
concluded with Vale consistent with initial terms set out in the
CSTS
-- Signing of PPTS and CSTS paves the way for further
integration possibilities to enhance and optimise operational
synergies between Vale and Kibo
Louis Coetzee, CEO of Kibo Energy, commented, "Finalisation of
both a PPTS and a CSTS in such a short span of time after the
completion of a Base Case Definitive Feasibility Study and
Independent Financial Model clearly reflects the commercial
robustness of the project, both representing key milestones in the
development of our first pure energy project. Ultimately, this
demonstrates the urgent need and fast-growing demand for
electricity in a mineral and resource rich region, which will
remain unexploited without access to reliable and affordable
electricity.
"In addition to the above referred term sheets, the Company also
had further formal engagement with EDM, Mozambique's national
utility over the past week, as part of the ongoing process set out
in the existing MOU between the parties, to develop and ultimately
agree a PPA for the balance of the electricity that will be
produced from the BPPP and not sold to private off-takers. These
very productive and technical discussions acknowledged the
relevance of the declared corporate strategy of Kibo, whereby the
BPPP is gaining increasing recognition as a critical energy project
in Mozambique, with a pivotal role to play in providing a
comprehensive energy solution, rather than just being capacity to
generate electricity. The success of energy projects in developing
economies and which is true for all of the Company's utility scale
projects, will continue to depend on our ability to demonstrate a
profound understanding, capacity and commitment to address the
needs and requirements of all legitimate stakeholders. I look
forward to updating shareholders on further progress."
Details on Non-Binding Term Sheets
Progress continues to be made to advance the Company's 65% owned
Benga Power Plant Project in Mozambique, where a 150-300 MW
coal-fired power plant is planned with fuel provided by local coal
producers.
To this end, the Company has signed a PPTS with Vale, a local
coal miner, and subsidiary of Vale SA, one of the world's largest
diversified miners, situated in very close proximity to the BPPP
site. Delivery of a PPTS is a key milestone and directly aligns
with the Company's energy strategy; it is very well developed and
demonstrates clear intention of the involved parties to enter the
next phase of negotiation aiming for execution of a final binding
PPA in Q4 2019 in compliance with all relevant regulatory and
statutory requirements.
The PPTS, completed in a short timeframe, highlights the urgent
need for a reliable power source in the region and provides for the
private off-take of c. 37% of the total available power production
of the first phase 150 MW boiler unit. Early engagement with power
off-takers furthermore enables the Company to accommodate specific
requirements in the development phase of the project, ensuring that
all specification and optimisation aspects are built into the first
phase of project design.
Additionally, the Company has signed a CSTS with Vale, which
provides for the supply of the total coal requirement of the BPPP
over the modelled 25-year life of plant. A blend of varying quality
bituminous coal can be procured from Vale, which will be fed to the
Power Plant boiler. Vale produces both metallurgical/coking coal
and thermal coal for the export market and aims to have a combined
production rate of 20 million tonnes per year by 2021. This
combination of scale and product diversity not only provides
security of feed supply over life of plant, but of critical
importance, provides the BPPP with the rare strategic advantage of
being able to rapidly adjust the optimal fuel quality requirements
of the power plant to comply with the varying operational and
technical requirements of the power plant. This control is possible
because of the certainty and diversity of feed supply
specifications able to be delivered from the mine and is in
contrast to many coalfired power plants, especially integrated
mine-mouth coalfired plants, where there are very few, if any,
options for materially varying the quality of fuel supply (which in
turn denies them the ability to achieve and maintain optimal
production, emission and cost efficiencies). In addition to other
optimisation opportunities being evaluated, this aspect is expected
to afford the BPPP the opportunity to operate well above the
standard efficiency rates for coal fired power plants, providing
valuable economic benefits for the BPPP and clients alike.
Kibo was able to negotiate a competitive coal price mechanism
with Vale, which includes the benefits of eliminating a substantial
portion of coal transport and handling cost by virtue of the coal
source being virtually co-located with the BPPP site.
The CSTS provides the framework and initial terms from which
Kibo and Vale will seek to agree a final definitive CSA.
Conclusion of a PPA or CSA remains subject to typical matters
such as final negotiations, internal approvals, regulatory
approvals, due diligence and entry into definitive legal
documentation satisfactory to both parties.
More about Vale Moçambique, S.A.
For more information on Vale Mozambique, please access the
following weblink:
http://www.vale.com/EN/business/mining/coal/Pages/default.aspx
**ENDS**
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014.
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
----------------------- ---------------------- --------------------------
Jason Robertson +44 (0) 20 7374 First Equity Limited Joint Broker
2212
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Andrew Thomson +61 8 9480 2500 RFC Ambrian Limited NOMAD on AIM
----------------------- ---------------------- --------------------------
Isabel de Salis +44 (0) 20 7236 St Brides Partners Investor and Media
/ 1177 Ltd Relations Adviser
Gaby Jenner
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Notes
Kibo Energy PLC is a multi-asset, Africa focussed, 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 Power Plant Project ('BPPP') 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
5 September 2019
Corporate and Designated Adviser
River Group
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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