TIDMKIBO
RNS Number : 9046Y
Kibo Energy PLC
18 May 2021
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 18 May 2021
Kibo Energy PLC ('Kibo' or the 'Company')
Agreement to Co-develop Renewable Energy Projects in South
Africa
Kibo Energy PLC, the multi-asset, African focused energy
company, is pleased to announce that it has entered into an
agreement with South Africa-based Industrial Green Solutions (Pty)
Ltd ('IGES') ( https://www.industrialgreenenergy.com/ ) to jointly
develop a portfolio of Waste to Energy projects in South Africa
('the Agreement') with an initial target of generating more than 50
megawatts of electricity for sale to industrial users. The
Agreement, which is subject to the satisfaction of certain
conditions, is in line with Kibo's strategy to integrate renewable
energy into its project pipeline, which includes three
utility-scale power generation and mining projects.
Highlights
Targeting South Africa's chronic shortfall in electricity and
high plastic waste disposal costs
-- Under the terms of the Agreement, Kibo will own 65% of Newco
Energy (Pty) Ltd ('Newco'), which will hold the Waste to Energy
Project Portfolio, with IGES holding 35%
-- Newco will initially develop a phased c. 8MW project for an
industrial client, to be followed by six other projects at
different sites, to a total generation of up to 50MW.
-- Initial Project Pipeline comprise of seven projects in place,
and will utilise Pyrolysis technologies to convert waste
non-recyclable plastics to syngas for the generation of energy:
o Pyrolysis technology to be supplied by a local international
technology firm in the form of a waste to energy conversion
plant;
o Syngas to be stored on site and fed into gas engines to
generate electrical power; and
o Off takers for all seven projects have been identified with
Power Purchase Agreement (' PPA') negotiations underway
Project 1 - Most Advanced in Project Portfolio and Involves the
Development, Construction and Operation of a c. 8MW Base Load Waste
to Energy Generation facility
-- MOU for the supply of energy signed with industrial client in
Centurion (Pretoria, South Africa) - 1 0-year "Take or Pay" PPA
negotiated subject to independent review;
-- Fuel feedstock supply agreement signed with waste management
operator for 100% of project's fuel requirement - intention to
operate from a 9 - 12-month stockpile;
-- Land acquisition and waste licensing completed, air emissions
license submitted and grid connection approval process
underway;
-- Capacity to be scaled up from c. 2 MW to 8 MW, in 4 x 2 MW phases over three years;
-- Project development duration for first phase of 2 MW expected
to be no longer than 16 months including construction;
-- Kibo will fund NEWCO, commencing with an amount of
R11,145,000 (GBP560,000) as an Equity Loan to Newco for the
development of this first project (Project 1- referred to above);
and
-- Kibo will be developing the project portfolio with Lesedi Nuclear Services (Pty) Ltd ( https://lesedins.co.za/) as strategic partner for EPC and Operations and Management services
Louis Coetzee, CEO of KIBO said: "This opportunity to enter the
South African waste to energy market in strategic partnership with
Lesedi and IGES, is a win - win for all parties. For Kibo, today's
Agreement is in line with our strategy to integrate sustainable
environmentally friendly energy generation into our portfolio,
which could shortly include waste to energy projects in the UK
currently the subject of a due diligence investigation. The 50MW
project pipeline also positions Kibo squarely in the new and
exciting renewable energy industry in South Africa and places us
firmly on a programme to production and revenue in the short to
medium term.
For IGES, the company gains a partner in Kibo with a track
record not only in project development but also in project finance.
For South Africa, the Pyrolysis technology provides a perfect
solution to the disposal of plastics in the country, which up until
now is high cost and subject to cumbersome procedures and under
most recent legislation prohibits the disposal of plastics with a
CV (Calorific Value) of more than 20 in landfill facilities. In
addition, Newco will enable South African industry to operate
independently from the National Utility, Eskom and secure stable
power supplies. With the above in mind, we are keen to get started
at the earliest opportunity and I look forward to providing further
updates on our progress."
Transaction Background
Kibo has entered into an agreement with IGES to jointly develop
a series of Waste to Energy projects in South Africa to address the
insecure energy supply environment in the country by enabling
industries to operate independently. The Agreement resulted in the
establishment of Newco, in which Kibo will hold 65% for an Equity
Loan contribution of R11,145,000 which will serve as project
development funding for the initial project and IGES will hold 35%
for an equity contribution to the value of a seven - project
portfolio and development expenditure to date. Newco will initially
develop a phased c. 8MW project for an industrial client, to be
followed by six other projects at different sites, to a total
generation of up to 50MW.
The Waste to Energy concept entails the conversion of plastic
waste (provided by leading waste disposal operators) by a Pyrolysis
plant, into syngas. The syngas will be stored on site and fed into
gas engines to generate electrical power.
Kibo, from the commencement date of the Agreement referred to
above, will fund Newco, commencing with the equity loan of
R11,145,000 referred to above, whereafter funding of Newco's
approved budget will be funded through a combination of various
standard commercial funding options, repayable from free cash
generated by Newco from its Projects.
The first project, i.e., the project to supply power to an
industrial client, is in an advanced project development stage,
with access to land, key licenses and approvals acquired, and an
offtake MOU and PPA negotiations concluded.
South African Energy Environment
Electricity is in short supply in South Africa and despite the
efforts of the management of National Utility, ESKOM, rolling
blackouts have remained an integral part of the industrial
landscape in the country. Furthermore, several current coal-fired
power plants will come to the end of their economic lifespan in the
next ten years, further curtailing energy supply. An indicative
near-term energy requirement of 11,800MW was recently envisaged by
the President of South Africa.
Sustained power cuts, caused by under-investment and a shortage
of generating capacity, have damaged the South African economy. The
response has been a belated thrust towards more power supply, from
a combination of coal-fired power plants, oil and gas, wind and
solar, and potentially a fleet of new nuclear power stations.
Planners are now considering the addition of independent power
producers (IPPs) to the energy mix and small-scale residential
generation as citizens, increasingly frustrated by load-shedding
and rising electricity prices, are starting to install their own
generation systems.
Electricity generation is thus becoming decentralized, and the
line between consumer and producer is beginning to blur and the
electricity sector is moving away from a monopolistic model. New
players are taking on roles and responsibilities historically
controlled by national utility, Eskom, which is made more complex
given the growing number of IPPs. (Extracted from
https://www.weforum.org/agenda/2015/09/how-do-we-solve-south-africas-energy-crisis
)
In response to this context, developers and industrial users are
looking to various forms of embedded energy supply. These private
initiatives, generally deployed in smaller-but-more-distributed
units, will form an increasing part of the South African energy
landscape over time as private enterprises seek to achieve some
level of independence from the national grid.
Newco intends to operate in this space.
Waste Management
South African authorities have expanded the responsibility of a
waste generator to ensure that the waste products from their
activities are managed responsibly on a cradle-to-grave basis.
Secondly, the regulations continuously constrain the types of
waste that are allowed to be sent to landfill. Certain plastics,
for instance, can no longer be landfilled due to its high calorific
value. Plastic generators therefore have to find alternatives for
the disposal and/or recycling of these waste streams.
Primary Technology
Pyrolysis Technology is an advanced conversion technology that
can produce a clean, high calorific value gas from a wide variety
of waste and biomass streams. The hydrocarbon content of the waste
is converted into a gas, which is suitable for utilization in gas
engines, with associated electricity generation.
Conditions Precedent
The Agreement is subject to three conditions precedent, to be
met by 15 June, 2021 (the "Longstop Date") being:
o Kibo completing detailed Due Diligence with respect to the
commercial viability and fundability of the Project(s);
o Kibo obtains written approval from its Board of Directors;
o Kibo Energy shall have advanced the full amount of a c. R11.1
million Equity Loan to Newco.
**S**
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 Chief Executive Officer
PLC
Andreas Lianos +357 99 53 1107 River Group JSE Corporate and Designated
Adviser
---------------------------- ------------------- -----------------------------
Claire Noyce +44 (0) 20 3764 Hybridan LLP Broker
2341
---------------------------- ------------------- -----------------------------
Bhavesh Patel +44 20 3440 6800 RFC Ambrian NOMAD on AIM
/ Stephen Allen Ltd
---------------------------- ------------------- -----------------------------
Isabel de Salis info@stbridespartners.co.uk St Brides Partners Investor and Media Relations
/ Charlotte Hollinshead Ltd 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.
Johannesburg
18 May 2021
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
AGRFLFFREEIDLIL
(END) Dow Jones Newswires
May 18, 2021 02:00 ET (06:00 GMT)
Kibo Energy (LSE:KIBO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Kibo Energy (LSE:KIBO)
Historical Stock Chart
From Apr 2023 to Apr 2024