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
("Kibo" or "the Company")
Dated: 21 May 2019
Kibo Energy PLC ('Kibo' or the 'Company')
Update on MAST Energy Developments Limited
Kibo Energy PLC ("Kibo" or the "Company"), 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 reserve power generation market.
· MED has today executed a Sale and Purchase Agreement ("SPA") to acquire Bordersley Power Limited ("Bordersley"), a Special Purpose Vehicle ("SPV"), from Balance Power Projects Limited ("Balance")
· Bordersley will comprise a 5MW gas-fueled power generation plant, supported by:
o an option to lease the land which would be the project site ("Option for Lease")
o a Grid Connection Offer (to be novated to Bordersley); and
o a Gas Connection Offer (to be novated to Bordersley)
· Completion of the acquisition is subject to satisfaction or waiver of the Conditions Precedent by the Longstop Date of 14 to 21 working days from the date of SPA execution:
o Novation of the Grid Connection Offer and Connection Offer Novation to Bordersley
o Completion of the Option to Lease novation to Bordersley
o Completion of a deed of variation of the Option for Lease pursuant to which SWB Power Ltd is replaced as Guarantor under the Lease by a person nominated by the Buyer.
o Receipt of various planning and title permissions and reports
o Comprehensive technical and economic Due Diligence performed to MED's satisfaction
· If the Conditions Precedent have not been satisfied or waived on or before the Longstop Date the SPA shall terminate on the day after the Longstop Date unless an extension is mutually agreed
· Completion shall take place on the fifth business day after the fulfilment or waiver of the last of the Conditions Precedent or any other date agreed by the Seller and the Buyer in writing
· On Completion:
o MED will pay Balance GBP175,000 in cash consideration and reimburse Balance GBP2,000 in costs related to the Gas Connection Offer; and
o The existing directors and officers of Bordersley to resign, with Louis Coetzee and Pieter Krügel to be appointed as directors of Bordersley
· Warranties, representations and undertakings typical of a transaction of this nature are included
· Engineering, Procurement and Construction ("EPC") proposals have been received and multinational Clarke Energy has been selected as the preferred EPC contractor, and peaking power generation construction specialists Encora Energy selected as preferred Owners Engineer
· Subject to successful financial close and notice to proceed, and no external connectivity delays, targeting commercial commissioning of the Bordersley site in late Q4 2019 / Q1 2020
Louis Coetzee, CEO of Kibo Energy, commented, "This initial strategic acquisition made by Mast Energy Developments is a key milestone as they advance on their strategy to become a key player in the UK flexible power generation market. Preparations, including the appointment of an EPC contractor and owners engineer, as well as commercial discussions are well underway ahead of MED's target of first operations in late Q4 2019 / Q1 2020.
Following the completion of a full evaluation of EPC suppliers for MED's targeted portfolio, Clarke Energy has been selected as the preferred supplier. MED will now negotiate turnkey EPC Contracts with Clarke Energy as its preferred partner and immediately commence with the contract negotiations.
Clarke Energy is a multinational specialist in the engineering, installation and maintenance of reciprocating engine-based power plants and gas engine compression stations. Clarke Energy's offering ranges from the supply of an engine, through to the turn-key installation of a multi-engine power plant, and its facilities deliver fuel efficiency and help reduce carbon emissions.
Clarke Energy is the largest authorised distributor and service provider for Jenbacher reciprocating engines, having commissioned more than 3,500 engines worldwide. It has over 85 field-based Service Engineers operational in the UK, representing nine geographical regions, each with an Area Manager, in addition to a team of 10 National Support/Commissioning Engineers providing specialist support to the regional areas if/when required.
Owners Engineer (OE)
Encora Energy Limited has been selected as the preferred owners engineer for MED's first site, Bordersley. Encora Energy has a track record in delivering power generating projects having successfully delivered over 150MW of gas fired peaking generation projects including grid connections, gas connections, planning consents and land agreements.
Returns and Finance
Robust financial analysis of Bordersley supporting the acquisition has been concluded by MED with inputs from a wide array of market participants.
MED intends to source external financing to fund any potential development of Bordersley, and in furtherance of that objective negotiations are ongoing between MED and several parties for various forms of mezzanine debt equity, equity linked instruments and convertible notes.
The estimated capital expenditure ("CapEx") for the project is £3.6m. MED has received an indicative term sheet for debt financing of 65% of the CapEx amount. Kibo anticipates being able to update shareholders on key operational and financial particulars of the project as the debt and route to market PPA contracts advance and the due diligence results are refined.
At this stage it is not anticipated that Kibo will be required to fund MED's development of Bordersley.
Route to Market Agreement- Power Purchase Agreement
MED is engaged in negotiations with Statkraft Markets GmbH and has received a term sheet for a power purchase agreement. These negotiations include a floor price for a three year period. MED has granted exclusivity to Statkraft during the negotiating period. These include the input from the MED advisory panel regarding the implementation and execution of the MED desired trading and optimization strategy.
MED is in the process of appointing an Advisory Panel and is in discussions with leading names in the power markets to become panel members ("the Panel"). The Panel will provide advice in terms of trading, optimization strategy and risk management to MED.
MED's Project pipeline and focus
MED continues to focus on the development of their pipeline of peaking power sites with its emphasis shifting from 33kva sites to 11kva sites. This is expected to provide superior returns in the medium and long term with concomitant lower costs.
In addition to the current sites under exclusivity (as per previous RNS') MED has also negotiated exclusivity at no cost for an additional site of 7Mw and Kibo will update on progress in due course.
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:
Kibo Energy PLC
Chief Executive Officer
+27 (0) 83 4408365
Corporate and Designated
Adviser on JSE
Ben Tadd /
+44 (0) 20 3700 0093
SVS Securities Limited
+44 (0) 20 7374 2212
First Equity Limited
+61 8 9480 2500
RFC Ambrian Limited
NOMAD on AIM
Isabel de Salis /
+44 (0) 20 7236 1177
St Brides Partners Ltd
Investor and Media Relations Adviser
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 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.
21 May 2019
Corporate and Designated
Adviser River Group
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