JSE- and Aim-listed Kibo Energy on Monday confirmed that it is developing four key projects – two thermal coal power projects, in Botswana and Mozambique; a UK-focused flexible energy portfolio; and an advanced coal-to-power project, in Tanzania – in parallel. The projects fall in line with the company’s strategy to progress a diverse portfolio of advanced power generation and mining projects in sub-Saharan Africa and the UK through international relationships with key development partners. Each of these projects are said to hold significant value, which CEO Louis Coetzee believes is not accurately reflected in the company’s current share price. The first of the four projects is the Benga independent power project, in Mozambique, in which Kibo holds a 65% interest. The project is progressing rapidly as Kibo looks to build and operate a coal-fired power station of between 150 MW and 300 MW, with feedstock provided by regional coal producers. In a letter to shareholders on Monday, Coetzee confirmed that the feasibility study is ahead of schedule and well advanced.
Kibo is working on finalising the coal supply agreement (CSA) for the project, as well as the power purchase agreement (PPA) with private offtakers, both of which are expected to be finalised during April. In parallel to these agreements, PPA negotiations with the Mozambique power utility Electricidade de Moçambique, are also progressing.
The second project, the Mabesekwa coal independent power project, in Botswana, in which Kibo has an 85% interest, is currently at feasibility stage following the completion of a mining scoping study, which highlighted a 30-year life-of-mine (LoM). A power prefeasibility study has indicated a maximum power capacity of 600 MW based on a coal delivery rate of 3.2-million tonnes a year. Currently, the mining licence is still outstanding for the Mabesekwa coal mine, but is “on a clear development path with visible deliverables that will, when reached, increase the inherent value of the project”, Coetzee said.
The third project touches on Kibo’s 60%-owned UK subsidiary, Mast Energy Development, which, according to Coetzee, is making great strides as it looks to support the UK energy mix with much-needed flexible energy projects.
Its strategy is to acquire and develop a portfolio of small-scale power generation assets. Coetzee confirmed on Monday that various “shovel ready” sites have already been identified, which are capable of sustaining gas-fired power generators and ancillary structures from 20 MW upwards.
Financial modelling by Mast Energy projected an internal rate of return of between 13% and 16% and a net present value of between £16-million and £19-million for the initial assets. “We’re close to completing the acquisition of the first sites and due diligences on several more are nearing conclusion from which further site acquisitions will in all likelihood follow,” Coetzee noted.
The company anticipates that this model can be introduced to its operations in Africa, and that fossil fuel reliant energy assets will be enhanced with clean burning and renewable technology, with the intention to migrate all existing and new assets to more sustainable energy sources in the medium to long term.
The fourth, and last, project encompasses Kibo’s 100%-owned Mbeya coal-to-power project (MCPP) in Tanzania, where Kibo is actively pursuing opportunities to commercialise the project. However, Coetzee noted that the current Tanesco tender process for coal-fired power does not satisfy its full quota for coal-fired power in Tanzania, from which the MCPP is not excluded. Kibo is still pursuing its clarification request to Tanesco to provide reasons for not qualifying the MCPP in terms of the current tender for coal-fired power.
All four of these projects, Coetzee highlighted, have been chosen for specific reasons after extensive evaluations, and are intended to address Africa’s acute power deficit and the UK’s state of flux as it adjusts to the decarbonising, decentralising and digitisation of the power market.