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Kibo Energy #KIBO – Corporate Update

Kibo Energy PLC, the multi-asset, Africa focused, energy company, announces a corporate update in response to the COVID-19 pandemic (‘the pandemic’). 

Kibo places the safety and wellbeing of its employees and contractors as the highest priority. Accordingly, in response to the outbreak of the pandemic, which it has been monitoring closely, a business continuity programme has been put in place to protect employees while ensuring the safe operation of the Company.  This has resulted in all non-essential travel being cancelled and all employees at head office being asked to work from home.

Given the number of jurisdictions in which Kibo operates that have each approached the pandemic with different strategies, the Company continues, where possible, to work with all stakeholders across its portfolio remotely and to keep operations going as normal as possible.  There is currently no material change to the Company’s strategy and development plan nor is any such change anticipated at this stage.

The situation in respect of COVID-19 is an evolving one and the Board will review the impact on business and provide further updates in due course including in respect of its forward guidance.

Louis Coetzee, CEO of Kibo Energy, commented, “We remain cognisant of COVID-19’s growing impact on the global economy and accordingly have focused on protecting our own employees.  As each jurisdiction in which we work has approached the virus in different ways, and the situation continues to change on a daily basis, at this stage we are unable to provide specific updates on each project but we are able to confirm that at the moment all Kibo’s projects remain fundamentally sound and healthy. We will of course continue to monitor the COVID-19 impact and provide further updates as soon as we are in a position to do so.”

**ENDS**

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

Philip Adler

+44 (0) 20 7392 1494

ETX Capital Limited

Joint Broker

Bhavesh Patel / Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor and Media 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 UK Reserve Power generation market.

Kibo Energy #KIBO – Mast Energy Developments & Bordersley Update

Kibo Energy PLC, the multi-asset, Africa focused, energy company, is pleased to provide an update on its subsidiaries, Bordersley Power Ltd (‘Bordersley’) and Mast Energy Developments Ltd (“MED”). The Bordersley 5 MW gas-fuelled power generation plant in the UK is currently being developed for Kibo by the Company’s 60% owned subsidiary, manager and operator of Bordersley, MED.

Overview

  • In light of the recent coronavirus outbreak, MED’s joint development partner, AB Impianti S.R.L (‘AB’), who are based near Milan, Italy had to temporarily halt operations;
    • AB team are however now working remotely, and factories are operational again;
    • AB are managing the end-to-end Engineering, Procurement, and Construction (‘EPC’) scope of works (‘SoW’) for Bordersley, which includes providing exclusive access to AB construction and engineering capacity and capability as well as cogeneration plant and equipment (refer to RNS dated 30 October 2019);
  • As a result of the coronavirus outbreak, the EPC SoW have been delayed, meaning Bordersley’s commissioning will not be possible by Q1 2020;
  • MED and AB continue to progress activity as much as possible but at present cannot advise on revised timings as a result of the ongoing impact coronavirus continues to have – further updates will be made as soon as the Company has further clarity to do so;
  • MED has recently also received positive funding interest from multiple entities, and is in advanced discussions with regards to securing substantial financing of up to USD100,000,000 which could enable it to embark on a portfolio development strategy and implementation, which will see the simultaneous development of more than 20 sites from its prospective “shovel ready” portfolio of sustainable power generation assets in the UK

Louis Coetzee, CEO of Kibo Energy, commented, “This is clearly an unprecedented time and as we take guidance from official sources with regards to managing the coronavirus outbreak, it goes without saying that the safety of employees and their families is our priority.  As an Italian based firm, the temporary cessation in AB activity was unavoidable but we are grateful for their adaptive work approach, which has meant that they have quickly resumed working activity; this is testament to their commitment and focus on completing the relevant EPC SoW so that commissioning can commence at Bordersley.  At this point in time, given that the coronavirus outbreak is still ongoing, and its full impact is at yet unknown, we are unable to advise on when work will commence.  However, we continue to actively monitor the situation and will share further updates with shareholders as soon as we are able to do so.  This will also include further updates on the strong financing interest we have received from a number of entities keen to provide a significant funding package that could enable us to immediately establish more than 20 sustainable power sites.  Therefore, despite the pressures of the current global climate, things continue to progress positively and with improving prospects, and our focus and goals remain unchanged.”

**ENDS**

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 2212

First Equity Limited

Joint Broker

Philip Adler

+44 (0) 20 7392 1494

ETX Capital Limited

Joint Broker

Bhavesh Patel / Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor and Media 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 UK Reserve Power generation market. 

Kibo Energy #KIBO – Letter to Shareholders

Letter to Shareholders

Dear Shareholder,

Since 2018, we have worked hard to reposition the business as an energy company and to this end we have built a solid portfolio of four major projects.  However, as this portfolio has evolved and new technologies have advanced, so too has our strategy.  I have touched on this several times in past correspondence, but increasingly, we have recognised the importance of sustainability to create positive environmental and social impacts.  With this in mind, we have grasped the nettle and are steering our strategy towards taking a considered, responsible approach to providing energy solutions.

It goes without saying that the African Continent is in dire need of reliable, modern, affordable and sustainable energy given its rapid economic and population growth.  As highlighted in a report by the International Energy Agency, today some 600 million people do not have access to electricity and around 900 million people lack access to clean cooking.  

In the short to medium term, clean coal projects must continue to play a key role in providing power to help fill the immediate needs given it is still the cheapest, most reliable electrical energy source.  However, it is imperative in the mid to longer term to deliver sustainable power projects.  Kibo has taken on this challenge and aims to lead from the front, integrating renewable technology with the traditional base load generation solutions in a practical and affordable manner.

Accordingly, we continue to advance three utility-scale power station projects in Africa, designed to provide cost-effective, long term sustainable base load power. Positioned to tap into the Southern and East African Power Pools in Tanzania, Botswana and Mozambique, these projects will collectively add a significant percentage of the total current energy supply, of which more than half is attributable to South Africa.  Meanwhile, in the UK our 60% owned subsidiary, MED, remains on track to commission its inaugural flexible power site, Bordersley.   

I look forward to updating shareholders regularly as we progress these projects in tandem with our blue-chip international partners and provide further details on how new technologies we are will be incorporated into their development plans and become a crucial component in delivering Kibo’s growth ambitions in a sustainable manner.

I believe that 2020 is going to be an exciting year for Kibo as we look to deliver on the energy needs of the present without compromising future generations. 

Louis Coetzee

CEO

**ENDS**

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 2212

First Equity Limited

Joint Broker

Philip Adler

+44 (0) 20 7392 1494

ETX Capital Limited

Joint Broker

Bhavesh Patel / Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor and Media 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 UK Reserve Power generation market. 

Kibo Energy #KIBO – Shareholder Q&A Document

Kibo Energy PLC, the multi-asset, Africa focused, energy company, is pleased to release this Q&A to publicly answer questions it has received from shareholders over recent months. 

 

 

Can you provide an overview of Kibo’s strategy?

The rationale behind Kibo’s strategy is that 620 million people in Sub-Saharan Africa currently rely on firewood, kerosene and charcoal for energy needs with the associated adverse environmental impact of using these fuel sources.  With this in mind, Kibo aims to provide long-term energy solutions for sustainable regional economic development as the basis for Sustainability*.  Initially, it aims to develop its African projects with the latest clean coal burning technologies, since coal is still the cheapest electrical energy source. At the same time, Kibo recognises the environmental necessity and benefits of renewable energy generation and therefore is actively seeking opportunities to integrate this technology with the traditional base load generation solutions in a practical and affordable manner. 

Kibo’s existing project portfolio reflects its strategy, and, with a clear view to production in the short and medium term, will not only contribute to economic growth and stability in the project jurisdictions, but will also create value growth and stable long term returns to shareholders.

 

Can you rank each project in terms of importance to the country of operation and to the Company?

To rank projects in order of importance is an extremely circumstantial and sometimes subjective question, as a variety of drivers have an impact on project importance or priority.  For instance, project importance in terms of completion status, funding readiness etc. will be vastly different from project importance in relation to technical development, as different resource, timing and budgetary requirements will vary project importance from one condition to the other. The table below outlines the specific perspective in relation to the question asked given prevailing circumstances.

Table 1: Project Importance

Description

Importance

(5=Lowest 1=Highest)

Kibo Importance

Country Importance

Botswana

Coal

2

2

Power

KP1

4

KP2

1

Tanzania

MCPP

Power

3

3

Coal

2

Mozambique

BPPPP

Power

1

1

UK

Bordersley

Power

2

2

Notes to Table 1

Importance to Kibo: This part of the table was arrived at by combining the estimated (Kibo Attributable) project production values in terms of GWh per annum (Power) and Million tons per annum (Coal) currently covered under a provisional PPA or CSA.  This picture will change over time as more PPAs and CSAs are finalised.

Importance to the Country: In all cases and based on its strategy rationale, Kibo would argue that the specific project would be most important to the host country.  The project importance illustrated in the table, however, indicates the importance of the specific country to Kibo in relation to project importance. This makes more sense, as it would explain the attitude and willingness of Kibo to direct resources, time and funding towards the specific country.

Are NPVs attached to each project?

Yes, as part of the initial and ongoing economic feasibility assessment and financial modelling of each project, a key element is the assessment of the estimated inherent net present value (“NPV”) of a project. In developing and operating large utility-scale power station projects, a 20-30-year view is required and forecasting the attributable cash flows over such a period is more of an art than a science. That said, cash flows can be valued for projects of this nature, utilising discounted cash-flow as a methodology to arrive at an NPV for unlevered free cash flow generated from Kibo’s individual and combined power project portfolio. From this, we calculate the value of Kibo’s equity share, after debt, the market value of minority interests and Kibo’s share of the Developer’s Premium is also considered. The most recent example of the foregoing can be seen in the First Equity Research Note as published over a year ago on 28 November 2018 and available on Kibo’s website, which estimated the Company’s combined projects’ NPV at that time at US$1.9bn.

 

What financial modelling has been done across the portfolio?

As referred to in the above point, each of Kibo’s projects undergo robust initial and ongoing financial modelling. The financial modelling is conducted by an experienced reputable and appropriately accredited independent expert and is a key requirement of the final stages of the project development process (i.e. financial close and financing arrangements). The ongoing status of the financial modelling corresponds to the level of development of the specific project. In the case of MCPP for instance for which the development process has technically been completed, a final integrated bankable financial model has been finalised.

How and in what way will Kibo’s projects economically impact the various countries/regions and what is the prognosis of a successfully delivered project

The Kibo strategy guides the intended impact of its projects on the respective host countries. In order to fully understand this, the continental and regional context is to be fully understood.

 

African Projects – Background** & Regional Impact

Africa is set to emerge as a key driver of global energy demand growth, one that is home to abundant reserves of fossil fuels, solar power and minerals that will be vital for clean energy transitions worldwide. At the same time, the sub-Saharan economy has more than doubled in size since 2000 to reach $2.7 trillion in 2013 and despite relatively low gross domestic product (‘GDP’) growth since 2010, the overall sub-Saharan economy has expanded by more than one-third since, reaching more than $4.3 trillion in 2018.

The primary purpose of an energy system is to contribute to a better quality of life.  Measuring the extent to which the population of the sub-Saharan region lacks access to modern energy is the key to understanding why projections based simply on an extrapolation of past trends, or even on the basis of declared policy intentions, would fail to capture expressed another way, this huge pent-up energy demand. Increasing access to reliable, modern sustainable energy will turbo-charge economic growth in sub-Saharan Africa.

The region’s existing energy resources are more than sufficient to meet its overall needs, but they are unevenly distributed and under-developed, a fact that speaks strongly towards the benefits of regional energy integration.

Kibo’s projects are strategically positioned to tap into the Southern and East African Power Pools in Tanzania, Botswana and Mozambique.  The physical locations of the project sites are all within 100km from a current or future regional interconnector.  Additionally, they are designed to provide long term sustainable base load power at a tariff that is more affordable than current levelized cost of generation experienced in the countries listed above.

Kibo’s projects, while planned to impact significantly in the respective host countries, collectively will have a strategically important impact on regional economic growth by adding an estimated 6,44 Twh per annum to supply of the current 16 Twh, of which more than half is attributable to South Africa (2012 figures).  This implies that the impact of a fully delivered Kibo portfolio in the region could be around 30 – 40%.

 

UK Projects – Background

The current peak demand to the national grid is estimated to be as high as 50,000 GW. Much of the generation capacity meeting this demand is expected to be decommissioned as was officially announced by the Energy Secretary over time, inclusive and especially coal fired and certain nuclear installations by mid to end of the 2020s which could see as much of 21,5GW to be replaced by renewable energy. Transition to a clean economy, and specifically a low-carbon power generation environment, will have its own unique challenges, of which security of supply and grid stability could strategically be the most significant.

Small sized flexible generation capacity (“Peaking Power Plants”), sensibly distributed across the grid, is the answer for the short to medium term and as such has been included in the UK Power Policy Framework. Reliable peaking power plants provide key services to the National Grid as it is fast responding and flexible to generate power within seconds in the event of system failure or grid instability. The key success factor in this regard is an experienced and capable agent in the energy market where energy and energy-related products are bought and sold. Energy market prices tend to fluctuate and can be affected by a variety of factors. The market agent knows exactly when to buy or sell a product and will analyse enormous amounts of data to understand market mechanisms in order to ensure immediate response to demand.

MED is positioned in the flexible power market, and the Bordersley project will be the first in the stable to go live.

 

Country Impact

The table below is aimed at providing an insight into Kibo’s Strategic thinking, as the latter is driven by the economic disposition of the region and/or the country in which the projects are deployed.

Table 2: Economic Impact of Projects

Description of Country vis a vis Projects

Economic prognosis/impact

Botswana

Coal

 

Botswana has enjoyed strong and stable growth since independence, with sizable fiscal buffers and prudent policies playing a key role in shielding the economy despite diamond market weakness and volatility. Despite this, more recently, the limitations of Botswana’s diamond-led development model have become more apparent: growth is slower, inequality remains high and job creation is limited***.

The Shumba Energy Botswana initiative is informed by the first of the four priorities by the Botswana Eleventh National Development Plan (NDP11), namely “sustained and inclusive economic growth”. The establishment of a Coal to Liquid production capacity will provide Botswana with energy fuels and specialty chemicals and will contribute to the economic development priority referred to above.  Additionally, the projects will provide a substantial economic boost to employment, social development and a myriad of related spin – offs. The projects referred to above is roughly comparable to the SASOL business case

 

 

 

 

 

 

 

 

 

Power

KP1

 

 

 

 

 

 

 

 

KP2

Tanzania

MCPP

Power

This fully developed project comprising of a 39 MT mineable reserve and a 300MW 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 Licenses and the Project’s Water Permits were successfully renewed, showing continued dedicated work, progress and development on the MCPP.

The Tanzanian Power System Masterplan (2016) provides for a commitment of 880MW of installed power for export purposes by 2020 and an installed internal capacity of 10GW by 2025. To achieve this goal, the Government of Tanzania has embarked on reforming the Electricity Supply Industry (ESI) mainly by attracting private capital in the industry.

The MCPP, fully implemented, whether for export or otherwise, will add 1,84 TWh of power to the Tanzanian grid annually.  This impact, in the absence of any other registered projects to deliver in the medium term is substantial, adding approximately 22% installed capacity to the reported 1357 MW.

 

 

 

 

 

 

 

Coal

Mozambique

BPPPP

Power

This project will have a dual positive impact on the Mozambique economy.

–      Provision of 50MW of power (approximately 310 Gwh per annum) ensures security of power supply to the largest company and taxpayer in Mozambique.  This impact is a direct impact to the Mozambican economy.

–      Provision of approximately 85MW to EDM will address the current power demand and ensure grid stability. 

–      The strategic positioning of the BPPP will also allow power export into the Southern African Power Pool.

UK

Bordersley

Power

Small sized flexible generation capacity (“Peaking Power Plants”) such as Bordersley, sensibly distributed across the grid, is the answer for short to medium term and as such has been included in the UK Power policy framework. Reliable peaking power plants provide key services to the National Grid as it is fast responding and flexible to generate power within seconds in the event of system failure or grid instability. Several milestones in respect of the development of the Bordersley Project has been achieved by the Bordersley working/steering committee, which includes MED and its joint development partner, AB Impianti S.R.L as was reported in the RNS of December 10, 2019.

The key success factor in this regard is an experienced and capable agent such as Statkraft in the energy market where energy and energy-related products are bought and sold. Energy market prices tend to fluctuate and can be affected by a variety of factors. Statkraft, being an experienced and capable market player knows exactly when to buy or sell a product and will analyze enormous amounts of data to understand market mechanisms in order to ensure immediate response to demand.

MED, therefore, in the short to medium term will also impact directly in the UK economy by alleviating the pressure of an over strained energy system.

 

Are you still engaged with your partnership network and if so, to what extent?

The partnership network remains active and in place, and the aim is to consistently extend this, aligned with strategic requirements. Kibo targets leading-edge, blue-chip resources to ensure world-class delivery of sustainable energy solutions within its strategy.  The network serves multiples objectives, of which the most important is to lock in world class OEM and EPC and professional oversight capacity into project planning, design and delivery.  This not only enhances the fundability of projects, but also ensures optimal plant performance and life, thereby contributing not only to the concept of sustainability but ultimately to sustained long term investor returns.

The current partnership network is contained in the latest Corporate Presentation, available at: http://kibo.energy/wp-content/uploads/Q4-2019-Kibo-presentation_V3.0_Final.pdf?portfolioCats=86

Are you on track to generate first revenues from Bordersley at the end of Q1 2020 and what will this mean to the Company?

Yes, as recently announced in the latest Bordersley project update (RNS dated 10 December 2019), based on current planning and progress it is still expected that Bordersley will become commercially operational and generate first revenues at the end of Q1 2020.

The free cash flow and net profit to be generated by Bordersley and all other current and future projects will significantly contribute toward Kibo’s ongoing working capital requirements, with the ultimate goal for the Company to self-fund all ongoing working capital requirements from project revenues in due course.

 

Why hasn’t the share price performed?

The directors believe that the Company is undervalued and that its potential is not reflected in its current share price.  Difficult market conditions have not helped the share price, prompting investors to implement risk-averse strategies.  Despite this, Kibo has built an enviable and very strategic portfolio of major development projects that offer great potential.  Given their vast scale, the development of these projects could never offer a quick route to profits but rather a longer-term path to significant value add; the Company has never suggested otherwise. 

Due to the Company’s aggressive acquisition strategy implemented the past 18-months in line with its strategy, Kibo has been able to significantly increase and bolster its balance sheet asset value, as illustrated in the most recently announced financial results. The below table is an extract from Kibo’s 30 June 2019 Interim Results (RNS: September 27th, 2019):

 

Composition of Intangible Assets

30 June

2019

£

Mbeya Coal to Power Project

15,896,105

Katoro Gold PLC

787,108

Mabesekwa Coal Independent Power Project

9,376,312

Bordersley Power Project

2,595,000

Total

28,654,525

 

The Company currently has a Net Asset Value of GBP26,555,380 (as per the 30 June 2019 Interim Results). The foregoing translates to a share price value of 2.12p per share (based on the current issued share capital of 1,247,276,078 shares). This reflects the significant variance between the underlying asset value of the Company’s projects (carried conservatively at cost and not even fair market value) and the current prevailing share price and market capitalisation (c. 0.4p / GBP5m as of the date of this Q&A), translating to a current under-valuation / discount applied by the market of c. 80%.

The Directors strongly believe that this presents an opportunity for existing and prospective investors to buy into Kibo’s strong balance sheet at a significant discount.

*Sustainability represents the quality of being able to continue over a period of time and focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. The concept of sustainability is composed of three pillars: economic, environmental, and social.

**Extracted and paraphrased from two recent IEA publications, namely (1) the Africa Energy Outlook A Focus On Energy Prospects In Sub-Saharan Africa”, and (2) Africa Energy Outlook 2019, both available at www.iea.org.

***www.worldbank.org/en/country/botswana/overview

 

**ENDS**

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 2212

First Equity Limited

Joint Broker

Philip Adler

+44 (0) 20 7392 1494

ETX Capital Limited

Joint Broker

Bhavesh Patel / Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor & Media 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 UK Reserve Power generation market. 

Johannesburg

18 December 2019

Corporate and Designated Adviser

River Group

Kibo Energy #KIBO – MAST Energy Developments agreement with Balance Power Projects to build pipeline of reserve power plant sites

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.

Overview

·    Agreement with Balance Power Projects Development Ltd to build pipeline of shovel ready reserve power plant sites

·    MED on track to roll-out an initial portfolio of 100 MW of reserve power projects in the UK

Louis Coetzee, CEO of Kibo Energy, commented“Having already worked with Balance to acquire the Bordersley 5 MW plant, we are delighted to strengthen our relationship with a formal agreement.  This will provide MED with a steady flow of shovel ready sites, enabling it to rapidly build an initial portfolio of 100 MW reserve energy projects in the UK.

“We hope to replicate the success we have had with Bordersley, which, from its acquisition on 20 June 2019, is on track for commercial commissioning at the end of Q1 2020.  This will see us utilise not only our partnership with Balance, but also our other partners including global player Statkraft Markets GmbH for power purchase agreements and AB Impianti S.R.L for plant development including the EPC and funding.

“MED is progressing at a tremendous pace; we are delighted to be on that journey with its team and look forward to 2020 with confidence.”

Details

MED is focused on developing a portfolio of small-scale reserve power generation projects, initially in the UK.  In line with this, MED has signed a Site Development Agreement (‘SDA’) with Balance Power Projects Development Ltd (‘Balance’) to fulfil MED’s strict selection criteria to ensure top of the line performance and precise planification of building its power plants.

Under the terms of the SDA, Balance shall identify potential sites for projects, undertake feasibility analysis and, if MED agrees, take the necessary steps to secure and make ready the site for the commencement of plant development.  Each project will be put into a Special Project Vehicle (‘SPV’), which will be 100% owned and run by MED. 

Balance is a UK based developer of gas-based peak power plants, delivering low-cost power capable of rapidly responding to an increasingly volatile energy market. It manages the process from initial development through to commercial operation for its partners, working closely with landowners, land agents, distribution network operators and financial institutions to meet the growing demand in the sector.

**ENDS**

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 2212

First Equity Limited

Joint Broker

Philip Adler

+44 (0) 20 7392 1494

ETX Capital Limited

Joint Broker

Bhavesh Patel / Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor and Media 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 UK Reserve Power generation market.

Kibo Energy #KIBO – MED Signs Comprehensive Joint Development Agreement for Flexible Power Portfolio

Kibo Energy PLC, the multi-asset, Africa focused, energy company, is pleased to provide 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.

Highlights

  • Comprehensive Joint Development Agreement (‘JDA’ or ‘the Agreement’) signed with AB Impianti S.R.L (‘AB’) a subsidiary of the AB Group, a global leader in engineering, manufacture, and after sales service of Combined Heat and Power (‘CHP’) generation solutions, for the development of selected flexible power plants in the UK;
  • Agreement provides access to end-to-end Engineering, Procurement, and Construction (‘EPC’) solution with exclusive access to AB construction and engineering capacity and capability as well as cogeneration plant and equipment; and
  • JDA includes a comprehensive funding solution for the construction and commissioning of all sites ultimately approved and accepted for development, by AB.

Louis Coetzee, CEO of Kibo Energy, commented, “Executing a comprehensive JDA with a global player such as AB, is a key deliverable in terms of the overall development plan for MED. More specifically, it is a critical step towards securing the delivery of a fully operational site at Bordesley by end of Q1 2020 and the associated first revenue generation for the Company.  There is a roll out plan for MED and we remain both supportive and excited on the delivery of further plants, widening our international partnership network and delivery of energy solutions in the UK and Africa.” 

“The comprehensive funding solution that forms part of the JDA provides Bordersley and MED with a unique opportunity to potentially have all sites approved for development, fully funded from the outset. This provides an opportunity to fast-track the parallel development of sites and simultaneously de-risk the MED overall development strategy.

“On a wider level we are in Maputo this week continuing negotiations with Vale Mozambique to finalize the Power Purchase Agreement and Coal Supply Agreements for the Benga Power Plant Project for which term sheets have already been announced. The Kibo portfolio is progressing and I look forward to announcing further updates as we continue to advance our multi project portfolio.”

Gary Collins Regional Sales Manager of AB, commented, “I am delighted with this arrangement which will see AB & MED design, manufacture and deliver world class projects in this critical sector of the UK’s power generation market. With an ever-increasing push for energy efficiency, renewable energy technology, and growing energy digitalization, this partnership will help to accelerate the implementation of local embedded power generation that the UK desperately needs.”

Details

As part of its strategy to develop a portfolio of small-scale Reserve Power generation projects, initially in the UK, MED concluded a Joint Development Agreement with AB, a subsidiary of the AB Group, a global leader in engineering, manufacture, and after sales service of Combined Heat and Power (‘CHP’) generation solutions. 

Under the terms of the JDA, MED has and will operate a portfolio and pipeline of projects in the UK and AB will engage in providing a comprehensive solution including the supply of co-generation plants under a rent or alternative funding option.

MED will initially present a list of three prospective projects which it considers suitable and are candidates for the comprehensive solution offered by AB in terms of the JDA (with Bordersley being the first site already under review). MED and AB will together establish a joint working/steering committee (‘SC’) to verify the progress of the JDA. AB agreed to, via the SC, make its best efforts within the agreed timeframes to assess the prospective projects in order to pursue those it considers feasible.

For each single project presented by MED, AB shall directly negotiate with MED all commercial, technical and legal terms and conditions, potentially leading to signature of the contract for the sale of the equipment and the AB financial structure (the ‘Contract’).

Mutual exclusivity clauses exist in the JDA, where for the initial 12-month term (renewable with the consent of both parties), and two years following the expiration of the agreement, MED agrees to and undertake to appoint AB as the exclusive contractor for the supply of the plants for its UK projects, and AB agrees and undertakes to develop and fund any UK Reserve Power generation projects exclusively with MED.

The AB Group is present in 19 Countries and has installed over 1 600 Mw in over 1 250 plants. Over 1,100 plants are managed by AB Service.

**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 2212

First Equity Limited

Joint Broker

Bhavesh Patel/Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor and Media 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

30 October 2019

Corporate & Designated Adviser

River Group

Kibo Energy #KIBO – Placing to Raise a minimum £ 1.5 Million

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.

Highlights

·     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 PER SHARE

NUMBER OF SHARES PURCHASED

SHARES HELD AFTER PURCHASE

% HOLDING POST PURCHASE

Christian Schaffalitzky (& related parties)

Non-Executive Chairman

0.45p

3,885,000

6,004,842

0.53%

Louis Coetzee (& related parties)

CEO

0.45p

11,440,000

19,505,996

1.71%

Tinus Maree

Executive Director

0.45p

4,485,600

7,419,800

0.65%

Andrew Lianos (& related parties)

Non-Executive Financial Director

0.45p

9,485,000

17,073,633

1.50%

Noel O’Keeffe (& related parties)

Non-Executive Technical Director & Secretary

0.45p

3,445,600

7,037,047

0.62%

Wenzel Kerremans

Non-Executive Director

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 below:

·     Mozambique:

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.

·     Botswana:

o  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.

o  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)

o  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.

·     Tanzania:

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.

**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 2212

First Equity Limited

Joint Broker

Bhavesh Patel/Stephen Allen

+44 20 3440 6800

RFC Ambrian Limited

NOMAD on AIM

Isabel de Salis /

Beth Melluish

+44 (0) 20 7236 1177

St Brides Partners Ltd

Investor and Media 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

09 October 2019

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