| Thu 5 Sep 2019, 8:00 | | KIBO ENERGY PLC - KBO : Kibo inks Power Purchase & Coal Supply Term Sheets with Vale Moambique, S.A for Benga Power Plant Project: developed and demonstrates clear intention of the involved parties to enter the next ph |
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KBO : Kibo inks Power Purchase & Coal Supply Term Sheets with Vale Mo?ambique, S.A for Benga Power Plant Project: developed and demonstrates clear intention of the involved parties to enter the next phase of negotiation
aiming for execution of a final binding PPA in Q4 2019 in compliance with all relevant regulatory and
statutory requirements.
The PPTS, completed in a short timeframe, highlights the urgent need for a reliable power source in the
region and provides for the private off-take of c. 37% of the total available power production of the first
phase 150 MW boiler unit. Early engagement with power off-takers furthermore enables the Company
to accommodate specific requirements in the development phase of the project, ensuring that all
specification and optimisation aspects are built into the first phase of project design.
Additionally, the Company has signed a CSTS with Vale, which provides for the supply of the total
coal requirement of the BPPP over the modelled 25-year life of plant. A blend of varying quality
bituminous coal can be procured from Vale, which will be fed to the Power Plant boiler. Vale produces
both metallurgical/coking coal and thermal coal for the export market and aims to have a combined
production rate of 20 million tonnes per year by 2021. This combination of scale and product diversity
not only provides security of feed supply over life of plant, but of critical importance, provides the
BPPP with the rare strategic advantage of being able to rapidly adjust the optimal fuel quality
requirements of the power plant to comply with the varying operational and technical requirements of
the power plant. This control is possible because of the certainty and diversity of feed supply
specifications able to be delivered from the mine and is in contrast to many coalfired power plants,
especially integrated mine-mouth coalfired plants, where there are very few, if any, options for
materially varying the quality of fuel supply (which in turn denies them the ability to achieve and
maintain optimal production, emission and cost efficiencies). In addition to other optimisation
opportunities being evaluated, this aspect is expected to afford the BPPP the opportunity to operate
well above the standard efficiency rates for coal fired power plants, providing valuable economic
benefits for the BPPP and clients alike.
Kibo was able to negotiate a competitive coal price mechanism with Vale, which includes the benefits
of eliminating a substantial portion of coal transport and handling cost by virtue of the coal source being
virtually co-located with the BPPP site.
The CSTS provides the framework and initial terms from which Kibo and Vale will seek to agree a
final definitive CSA.
Conclusion of a PPA or CSA remains subject to typical matters such as final negotiations, internal
approvals, regulatory approvals, due diligence and entry into definitive legal documentation satisfactory
to both parties.
More about Vale Mocambique, S.A.
For more information on Vale Mozambique, please access the following weblink:
http://www.vale.com/EN/business/mining/coal/Pages/default.aspx
**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
Andrew Thomson +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
Gaby Jenner Relations Adviser
Notes
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 Power Plant Project ( BPPP') 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
5 September 2019
Corporate and Designated Adviser
River Group
Date: 05/09/2019 08:00:00
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