Kibo Energy directly addresses shareholders in update letter
Louis Coetzee, Chief Executive Officer of , addressed shareholders in a letter detailing progress the AIM listed energy company has been making in Sub-Saharan Africa and the UK.
Kibo Energy has four key projects: two thermal coal power projects in Botswana and Mozambique, an advanced coal to power project in Tanzania and a UK flexible energy investment.
Mr. Coetzee addressed the Benga Independent Power Project in Mozambique, updating shareholders the plans to construct and operate a 150-300 MW coal-fired power station with regional coal feedstock. It has a JV partner and government cooperation, who are “fully on-board”.
The feasibility study is 98% completed to date, and it is finalising a coal supply agreement as well as a power purchase agreement with private offtakers. This is expected to finalise in April 2019. The Memorandum of Understanding was expanded in December and Mr. Coetzee told shareholders that power purchase negotiations are progressing with the Mozambique power utility EDM.
Mr. Coetzee also updated shareholders on the Mabesekwa Coal Independent Power Project in Botswana. The project is in feasibility stage: a Mining Scoping Study highlighted a 30-year Life of Mine, and a Power Pre-Feasibility Study indicated a maximum power capacity of 600 MW based on a coal delivery rate of 3.2 Mt p/a. The company is awaiting its Mining Licence for the Mabesekwa Coal Mine.
Mr. Coetzee told shareholders that he was disappointed by the results of the tender process at Mbeyte in Tanzania. The company was informed that it did not qualify to compete in the next stage of the bidding process in February. He however highlighted fundamental value of the asset; the Bankable Feasibility Study indicated revenues of $7.5-8.5 billion and a post tax IRR 21%. He told shareholders that Kibo is pursuing its clarification request to TANESCO to provide reasons for not qualifying for the Mbeya Coal to Power Project.
“Our projects haven't been pulled out of a hat; they have been chosen for specific reasons after extensive evaluation. The fact that we have attracted and continue to retain the active involvement of international companies to work with us including GE and SEPCO III is a testament to this”, Mr. Coetzee outlined in a closing statement. He continued: “Africa represents a rapidly growing market economy with an acute power deficit”
Shareholders were also updated on its 60% owned UK subsidiary, Mast Energy Development. Kibo’s strategy is to “acquire and develop a portfolio of small-scale power generation assets”. Mr/ Coetzee told shareholders that “Shovel ready" sites have already been identified, capable of sustaining gas fired power generators and ancillary structures from 20MW upwards. The business plan projected IRRs of 13-16% and NPVs of GBP16-19 million for the initial assets alone.
Louis Coetzee commented: “The UK is in a state of flux as it adjusts to decarbonising, decentralising and digitising the power market; this could create a £6 billion flexibility market by 2030 according to a report by Aurora Energy Research.”
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