Letter to Shareholders

RNS Number : 3039M

Kibo Energy PLC

07 January 2019

 

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: 07 January 2019

Kibo Energy PLC ('Kibo' or the 'Company')

Letter to Shareholders

Dear Shareholder,

As we start a new year, I am writing to provide an overview of activities across our multi-project portfolio including three major and equally exciting African energy projects, and a UK flexible energy project which could generate near-term revenue.  Our strategy remains focused on the delivery of these energy projects to address the critical energy deficit in sub-Saharan Africa.  With approximately 580 million Africans still reliant on inefficient, unreliable and expensive energy sources, this remains a socio-economic imperative and therefore a key market opportunity. In 2018, through strategic acquisitions and divestments, we successfully repositioned Kibo as a purely energy-focused company, and our projects are now positioned to be critically important in the effort to provide power to more of Africa. 

In April 2018 we acquired an 85% interest in the Mabesekwa Coal Independent Power Project ('Mabesekwa') in Botswana which currently has:

·     obtained water and land use permits and environmental certification;

·     completed a Pre-feasibility study;

·     submitted an application for a mining license on the coal mine;

·     undertaken a Scoping Study on the power plant;

·     a clear development path with deliverables that are expected to increase the inherent value of this project

The year ahead will see us focusing on fast tracking the remaining technical work to complete an integrated bankable feasibility study for Mabesekwa. We will also dedicate priority time and attention to investigating new, very exciting commercial opportunities for the Mabesekwa project that were presented to Kibo during December 2018.

In June 2018 we acquired a 65% interest in the Benga Independent Power Project ('Benga') in Mozambique, which includes a 150-300MW coal fired power station.  This is being developed with our joint venture partner, Termoelectrica de Mozambique de Benga S.A. ('Termoeléctrica'), and is advancing according to plan. A full feasibility study designed to confirm its commercial and operational viability is progressing well ahead of schedule, and discussions regarding a Power Purchase Agreement ('PPA') with prospective off-takers continue to advance.  Notably, and most recently, we announced the renewal of an MOU with Mozambican state-owned electric utility, Electricidade de Mocambique ('EDM'), to advance the financing, construction and operation of this project.   We are also particularly pleased with recent progress in negotiations with potential coal suppliers and private power off takers and these discussions will receive priority attention during Q1 of 2019.

The MCPP was our first project and continues to represent one of the most advanced and strategically important socio-economic development projects in Tanzania, positioned to alleviate the country's current energy deficit.  Naturally, we were frustrated that the PPA with the Tanzanian Electric Supply Company ('TANESCO') was delayed and that additional work was required as the Government of Tanzania introduced new standardised project procurement processes. We are hopeful that we can now advance the project in a timely manner to hit key value trigger points, such as agreement of the PPA, during 2019 leading to the commissioning of a 300MW mouth-of-mine thermal power station; and in the longer term, this could potentially increase to 1,000MW.  It is important to once more note that the fundamental merits of, and Government support for the project, has never been questioned by any of the strategic MCPP stakeholders and remains strong.

Later in 2018, we acquired 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.  The strategy behind this acquisition was to generate near-term revenues for the Company.  Towards the end of 2018, we moved one step closer to achieving this, as MED secured an exclusive option to acquire three peaking power sites totalling 31.3MW, which have the potential to lead to revenue generation for Kibo in the latter part of 2019.

In summary, we believe that Kibo is in every respect, i.e. corporately, financially, operationally, very well positioned for growth, as we advance our strategy focused on the provision of energy in key under-serviced markets. Whilst we were disappointed that the MCPP did not progress as planned in 2018, we are also grateful to have been able to report very positive news during the year regarding the advancement of our equally important Mabesekwa and Benga energy projects in Botswana and Mozambique as well as our first foray into the UK energy sector. It is disappointing that the substantial milestones we have reached during 2018 have not been reflected in our share price, but we are confident that this should be corrected by the market over time.

We value our shareholders and understand the need to maintain regular contact. To this end, during 2018 we launched a new website, www.kibo.energy, and released 56 announcements to ensure that shareholders remain fully informed of our activities.  We also invited shareholders to submit questions in order to provide regular Q&A documents. We intend to continue this practice, so once again, please do submit any questions you might have to [e-mail] Additionally, we are planning an investor evening for end of January 2019 in London, with details in this regard to be announced at a later date.

I hope that 2019 is prosperous for you and thank you for your continued support.

Kind regards,

Louis Coetzee

CEO

*ENDS*

 

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

For further information please visit www.kibo.energy or contact:

Louis Coetzee	[e-mail]	Kibo Energy PLC	Chief Executive Officer
Andreas Lianos	[phone]	River Group	Corporate and Designated Adviser on JSE
Ben Tadd / Tom Curran	[phone]	SVS Securities Limited	Joint Broker
Jason Robertson	[phone]	First Equity Limited	Joint Broker
Andrew Thomson	[phone]	RFC Ambrian Limited	NOMAD on AIM
Isabel de Salis / Gaby Jenner	[phone]	St Brides Partners Ltd	Investor and Media Relations Adviser

Notes to editors

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 will benefit from its robust and experienced international blue-chip partnership network across its project portfolio, which includes: SEPCO III (China), General Electric (USA); Tractebel Engineering (Belgium); Minxcon Consulting (South Africa); ABSA / Barclays Africa; and Hogan Lovells International LLP.

Johannesburg

07 January 2019

Corporate and Designated Adviser

River Group

 

END

 

 

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