Kibo Energy PLC has announced an update regarding its agreement with Shumba Energy Ltd that repositions its interests in Botswana, namely the Mabesekwa Coal Independent Power Project (MCIPP).
- Signed first of a series of agreements to implement the heads of agreement with Shumba to reorganise the arrangements for the MCIPP and its associated coal asset in Botswana.
- Shareholder agreement signed in respect of restructuring Kibo Energy Botswana (KEB), providing Kibo with a 35% interest in KEB, which holds a total 761 Mt coal resource and has three customers.
- Signed shareholder agreement concludes restructuring of first Botswana subsidiary company, Kibo Energy LTD (Botswana).
- Remaining agreements on track to be completed by 20 March 2020 in which Kibo will also hold:
- 85% interest in an energy project, which is to be called KP2.
- 35-40% interest in a new 300 MW energy project (KP1) that will exclusively provide a new petrochemical plant with energy.
- Agreement gives Kibo access to a revenue stream from an estimated annual coal production of 7.5 Mt coal per year.
Background and details
In September 2019, Kibo and Shumba signed a binding heads of agreement with Shumba and various subsidiaries of each party to reorganise the arrangements for the MCIPP and its associated coal asset in Botswana.
The reorganisation sees the MCIPP retained assets consolidated into KEB. This enlarged project in which Kibo has a 35% interest has a total 761 Mt coal resource. An additional joint venture (KP2) between Kibo and Shumba (held 85%/15% respectively) will advance the existing MCIPP energy projects in Botswana.
Additionally, Kibo and Shumba will jointly manage and oversee the development of a bespoke 300 MW power station (the KP1 Power Plant) through the incorporation of a new company to be held 35%-40% by Kibo and the balance by Shumba.
Shumba will provide the full development funding requirement for associated feasibility and technical studies.
The KP1 Power Plant is envisaged to provide 300 MW power to a petrochemical plant (PCP), which will aim to provide first Botswana and then Africa with energy fuels and specialty chemicals.
The PCP is being developed by Coal Petroleum (CP), which is 80% owned by Shumba with other partners including leading Chinese EPC companies PowerChina International Group Limited and Wison Group. CP is engaged in advanced discussions with several regional purchasers of fuels and other petrochemicals in Botswana, South Africa, Namibia and Zambia.
The consolidated MCIPP Resource will supply the PCP, the KP1 Power Plant and the MCIPP power plant with coal.
A series of agreements are being advanced between the parties to implement the heads of agreement. The first key agreement is the shareholder agreement in respect of restructuring KEB, which has now been finalised. This concludes the restructuring of the first Botswana subsidiary company, Kibo Energy LTD (Botswana). The remaining agreements are on track to be completed by 20 March 2020.
Read the article online at: https://www.worldcoal.com/power/09122019/kibo-energy-to-reorganise-botswana-interests/