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Kibo to obtain stake in Mast Energy Developments

Published by , Assistant Editor
World Coal,

Kibo Energy PLC (Kibo), the Africa focused, energy company which owns the Mbeya coal-to-power project in Tanzania, has signed a Memorandum of Understanding (MOU) for the acquisition of a 60% equity interest in Mast Energy Developments (MED), a private UK registered company targeting the development and operation of flexible power plants to service the Reserve Power generation market.

Under the terms of the MOU, Kibo can acquire a 60% shareholding in MED for a consideration of £300 000 payable to existing MED shareholders in new Kibo shares and a share of future project revenue royalties, which will be reinvested in the company in the short term to an amount of £2.2 million.

According to Kibo, MED’s business strategy is to acquire and develop a portfolio of small scale power generation assets. Numerous “shovel ready” sites have reportedly already been identified in the UK, capable of sustaining gas fired power generators and ancillary structures from 20 MW upwards. They have full planning permission and permitting in place, long term lease agreements, grid and gas connection offers and positive feasibility studies, pertaining to technical and commercial viability.

Kibo’s initial review of MED’s business plan indicates that its first asset under acquisition in the UK described above can be up and running within 12 months, thus potentially providing revenue streams to Kibo in the short term. Similar lead time periods from site acquisition to generator installation and power generation are indicated for other projects of similar size in the UK. Financial modelling indicates projected IRRs of 13 - 16% and NPVs of £16 -19 million for the initial assets described above. MED is exploiting a growth niche market in the UK for small scale reserve power generation to balance out the national grid at critical times.

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