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(Alliance News) - Kibo Energy PLC on Wednesday said that its subsidiary, Mast Energy Developments PLC, has finalised a joint venture agreement with an institutional investor-led consortium led by Seira Capital Ltd.
Kibo is a Galway, Ireland-based company with energy projects in Africa and the UK, while Mast Energy is a London-based multi-asset operator in the flexible power market.
Shares in Kibo were up 18% at 0.065 pence in London on Wednesday afternoon, while shares in Mast Energy jumped 33% to 2.22 pence each.
Under the joint venture, the consortium will inject all required investment capital with an initial expected total investment of GBP5.9 million. There is no funding contribution required from Mast Energy.
Mast Energy will instead provide the required portfolio of low-carbon flexible gas generation peaker plants, totalling a combined generation output of up to 33 megawatts to be developed and/or acquired within the next year.
The venture also commits the two parties to finalise terms on a second joint venture, which would increase the expected total investment to GBP31 million.
"The JV provides the company with both a significant cash injection and stake in a portfolio of assets totalling an expected 33 megawatts that will be fully funded, constructed, in production and income-generating in the next 12 months. [Mast Energy's] share of income from the JV portfolio revenue, as well as its five-year MSA fee, will provide the company with a crucial long-term recurring income stream," said Mast Chief Executive Officer Pieter Krugel.
The five-year management services fee is calculated as GBP7,200 per megawatt per annum.
By Holly Beveridge, Alliance News reporter
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