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: 7 June 2019
Kibo Energy PLC ('Kibo' or the 'Company')
Update on Benga Power Plant Project
Kibo Energy PLC ("Kibo" or the "Company"), the multi-asset, Africa focused, energy company, is pleased to provide a comprehensive update on the Benga Power Plant Project in Mozambique ('Benga' or 'the Project'), further to the RNS published on 8 May 2019.
· Completed independent Base Case Financial Model - initial findings demonstrate the economic robustness and viability of Benga under Base Case DFS
· Progressing Environmental Impact Assessment ('EIA') and aligning it with the Base Case findings of the DFS
· Internal research on renewable energy and storage options indicate promising opportunities for optimisation in terms of plant availability and limiting greenhouse gas emissions
· Coal Supply Agreement ('CSA') Term Sheet with supplier advancing
· Power Purchase Agreement ('PPA') Term Sheet with private off-taker for 35-40% of generation capacity advancing
Louis Coetzee, CEO of Kibo Energy, commented, "The stars are aligning for our major new energy project in Mozambique, Benga, as we continue to advance in its development. Whilst in the past, we have labelled the Project as a thermal coal power project, in reality, it could encompass much more, as our own research on renewable energy and storage options indicate. However, our current priority is to complete term sheets for coal supply and power purchase agreements; I am pleased to say that discussions are progressing well for both. I look forward to updating shareholders on further progress soon."
The Company continues to advance its strategy focused on constructing and operating a 150-300 MW coal-fired power plant with fuel provided by local coal producers at its 65% owned Benga Power Plant Project in Mozambique. To this end, it has completed a Base Case DFS and grid integration solution in collaboration with STEAG Energy Services. Both study reports were presented and submitted to the Ministry of Mineral Resources and Energy ('MIREME') and Electricidade de Moçambique ('EDM') early in May 2019.
A first round Base Case approach was followed in the DFS to ensure feasibility and project viability under extreme conditions. Essential information from the Base Case DFS is as follows:
· Land is secured and suitable for first phase implementation of 150 MW.
· A reliable water source is close to project site (Zambezi river).
· Water quality tests revealed that the water is of acceptable quality for treatment and use in the Power Plant.
· Technology choice is a single 150 MW circulating fluidized bed ('CFB') boiler which offers the following benefits:
o Fuel flexibility.
o Low emissions with inherent Air Quality Control Systems ('AQCS') equipment.
o Low unburnt carbon in ash residue, translating into maximum combustion efficiency.
o No fuel milling and drying required prior to feed of CFB boilers.
o Lower operating and capital costs compared to pulverized coal boilers.
· Base Case plant availability expectations of 85% and steam cycle efficiency of 34% which is already on par / slightly above international benchmark standards. (NOTE: It is expected that plant availability could increase up to 91% and steam cycle efficiency up to 36% during the optimization phase currently underway);
· Proposed interconnection to grid is less than 5km away from the BENGA site.
· Opportunity to access low cost fuel source.
Notably, and most recently, an independent Base Case Financial Model has been completed and is under internal review. This indicates economic viability with a healthy project IRR and competitive electricity tariff, and confirms all assumptions and expectations of the Base Case DFS. A sensitivity analysis around key input variables of the Power Plant presented convincing evidence of a robust project.
The EIA is in progress and currently being aligned with the Base Case findings of the DFS.
In parallel with the Base Case DFS, Kibo has concluded substantive inhouse research on a renewable energy component combined with Coal Fired Power Plants. This research was aimed at finding solutions to increase electricity production with no additional greenhouse gas emission impact on the environment; initial indications are promising.
Additionally, discussions in relation to the CSA with a Mozambique coal producer are progressing well, with a fully developed Term Sheet in the final review stage by both parties. A PPA with a private off-taker is also advancing, with a Term Sheet for 35-40% of total generated power currently under review by both parties. Productive technical and PPA engagement with EDM for the balance of the plant's production capacity, under the existing MOU, is ongoing and proceeding. The development framework negotiation with MIREME has gained momentum after the presentation of the Base Case DFS recently.
Following industry leading practice, the next step in the Project's development process is optimisation of the Base Case Power Plant design with STEAG Energy Services and existing original equipment manufacturer ('OEM') partners. The option of adding solar and storage capacity to effectively service the internal energy demand of the Power Plant will be investigated in this optimisation programme. The aim is to further enhance the stated plant availability and steam cycle efficiency, whilst further limiting the emission of harmful gasses into the environment.
The results of this work programme will be incorporated into an optimised DFS report, which will be utilised to update the current Base Case Financial Model into an optimised model. This combined body of knowledge will be the basis of the technical specifications for the Engineering Construction and Procurement ('EPC') contract.
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.
07 June 2019
Corporate and Designated Adviser
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