TIDMKIBO
RNS Number : 0085C
Kibo Energy PLC
16 June 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: 16 June 2021
Renewable Energy Strategy
Kibo Energy PLC, the multi-asset, Africa & UK focused energy
company, is pleased to announce that, following an extensive review
of the Company's operations, the Company's primary focus going
forward will be on renewable energy opportunities. In line with its
refocused strategy centred on sustainable renewable energy
solutions and following the positive results of an extensive due
diligence process regarding the agreement with South Africa-based
Industrial Green Solutions (Pty) Ltd (IGES), the Company will now
proceed to conclude the transaction to jointly develop a portfolio
of Waste to Energy projects in South Africa ('the Agreement') (see
RNS dated 18 May 2021). In addition, the Company intends to appoint
specialist advisors to assist the Company in developing and
implementing an appropriate disposal strategy to dispose of its
coal assets or possibly repositioning these assets to make use of
alternative fuel sources other than coal, given latest rapid
advances in developing alternative fuel sources in this domain. It
will be the objective of this disposal strategy to ensure that
maximum value is realised from these projects, in which significant
value was created over several years.
Highlights
-- Refocused strategy centred around renewable energy
opportunities and capitalising on the global clean energy
revolution;
-- Proceeding with the Agreement to jointly develop a portfolio
of Waste to Energy projects in South Africa, which aim to address
the country's insecure energy supply environment as well as the
renewable energy portfolio in the UK, currently the subject of a
due diligence investigation; and
-- Intention to dispose of coal assets in accordance with a
disposal strategy that will realise value for shareholders.
Louis Coetzee, CEO of KIBO said, "First, we are delighted to be
progressing with this exciting opportunity to develop waste to
energy projects within South Africa as momentum in the global clean
energy revolution increases. Set against this background, we
believe that it is appropriate to refocus our strategy to utilise
our team's expertise and contacts as well as partnerships in the
energy sector to rapidly grow our renewable energy portfolio and
capitalise on what, in our view, is a ubiquitous growth story that
will run for many years. Shifting the Company's primary focus to
renewable energy projects will provide the Company with the
opportunity to develop projects with much smaller CAPEX
requirements and with a significantly shorter route to revenue
generation that is associated with much less risk and access to a
far wider and cheaper array of non-dilutive funding options.
Notwithstanding our firm belief that clean coal will continue to
play a key role in Africa's energy dynamics, we also believe that a
larger entity would be better placed to take our own coal-fuelled
power projects to production. We hope to maintain exposure to the
significant upside potential of these projects but have decided to
step down from our role as their primary funder and developer. We
look forward to updating the market further on the Agreement, the
disposals and our refocused strategy."
The Transaction
Further to the announcement dated 18 May 2021, the Company has
concluded its due diligence regarding the agreement with South
Africa-based IGES (https://www.industrialgreenenergy.com/), to
jointly develop a portfolio of Waste to Energy projects in South
Africa. These projects, which aim to address the insecure energy
supply environment in the country by enabling industries to operate
independently, will convert plastic waste provided by leading waste
disposal operators into syngas using Pyrolysis Technology; the
syngas will then be stored on site and fed into gas engines to
generate electrical power.
A Newco will be established, in which Kibo will hold 65% for an
Equity Loan contribution of R11,145,000, that will be used to
develop the first 8 megawatts ("MW") project in several phases and
IGES will hold 35% for an equity contribution valued on the basis
of a seven-project development portfolio and development
expenditure to date. Newco has an initial target of generating more
than 50 MW of electricity for sale to industrial users.
The first late-stage project has access to land, key licenses
and approvals acquired, with an offtake Memorandum of Understanding
and Power Purchase Agreement negotiations concluded.
Kibo looks forward to finalising the implementation of the
Agreement and minor outstanding matters ahead of completing the
shareholders agreement, upon which it will update the market in
terms of the key commercial aspects of the first project.
Renewable Energy Strategy
The Directors believe that clean coal-fuelled power projects
will continue to be necessary for a transitional period of some
decades to support Africa's rapidly increasing energy requirements.
The Company has therefore been developing three utility scale,
coal-fuelled power projects, located in Tanzania, Botswana, and
Mozambique. While these integrate several clean coal technologies
such as carbon capture and storage and the latest Circulating
Fluidized Bed and flue gas desulphurisation technologies, the
Company has also explored renewable energy opportunities for
several years to incorporate into the longer-term growth plans of
these assets, or as standalone projects.
Since early 2020 and the onset of the Covid-19 global pandemic,
the renewable energy drive has gathered pace with governments
worldwide pledging to reduce the reliance on carbon fuels within
their energy strategies. With this background, the Company
undertook a review of operations to establish the best way to
extract the substantial value it had created in its coal-fuelled
projects for shareholders. Accordingly, the Company has decided to
pursue a renewable strategy and dispose of its coal-fuelled power
projects; advisors will be appointed in due course to oversee this
process.
The joint venture with IGES mentioned above will form the
initial core to the Company's new strategy, however, it anticipates
that additional acquisitions/investments in the renewable sector
will be made to further strengthen this portfolio.
The South African government's recent announcement to allow
private investors to establish up to 100 megawatts of generating
capacity without requiring a license/ permit provides further
impetus in this regard and will bring along significant new
opportunities. Further updates will be made as appropriate.
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014.
ENDS
For further information please visit www.kibo.energy or
contact:
Louis Coetzee Kibo Energy PLC info@kibo .energy
Chief Executive Officer
River Group
JSE Corporate and Designated
Andreas Lianos Adviser +357 99 53 1107
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Hybridan LLP
Claire Noyce Broker +44 (0) 20 3764 2341
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Bhavesh Patel / RFC Ambrian Ltd
Stephen Allen Nomad on AIM +44 20 3440 6800
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Isabel de Salis St Brides Partners Ltd info@stbridespartners.co.uk
/ Investor & Media Relations
Charlotte Hollinshead Adviser
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Johannesburg
16 June 2021
Corporate and Designated Adviser
River Group
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