Last checked at (Sharecast News) - Africa-focussed energy company Kibo Energy updated the market on its agreement with Shumba Energy on Friday, that it said "significantly repositions" its interests in Botswana - namely the Mabesekwa Coal Independent Power Project (MCIPP) and associated coal asset.
The AIM-traded firm said it had signed the 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.
It said a shareholder agreement was signed to restructure Kibo Energy Botswana, providing Kibo with a 35% interest in it, which holds a total 761 million tonne coal resource and has three large customers.
The company said the signed shareholder agreement concluded the restructuring of the first Botswana subsidiary company, Kibo Energy Ltd Botswana.
It said the remaining agreements were on track to be completed by 20 March, in which Kibo would also hold an 85% interest in an energy project, which would be called KP2; and a 35% to 40% interest in a new 300MW energy project, KP1, that would exclusively provide a new petrochemical plant with energy.
The agreement gave Kibo access to a revenue stream from an estimated annual coal production of 7.5 million tonnes of coal per annum.
"We are delighted with the progress being made as we advance the restructuring of our interests in Botswana to significantly lower development and execution risk," said Kibo Energy chief executive officer Louis Coetzee.
"Being part of several much larger projects naturally provides many benefits and advantages to the company and its shareholders.
"Not least because, having finalised the shareholder agreement today, we'll be holding a 35% interest in an enlarged project with a total 761 million tonne coal resource that already has three large customers, whereas before we had one."
Coetzee said the company also continued to hold an 85% interest in the energy project, which would be called KP2 and in addition, a 35-40% interest in a new 300MW energy project, KP1.
He described that as a "bespoke" 300MW power plant, that would exclusively provide a new petrochemical plant with energy, where the costs of feasibility and technical studies would be funded by Shumba.
"We can now fully leverage our coal resource at Mabesekwa by providing and fast-tracking three different revenue streams, which would give Kibo access to a revenue stream from an estimated annual coal production of 7.5 million tonnes of coal per annum, compared to producing 1.5 million tonnes of coal per annum for its own consumption at the MCIPP power plant.
"As I mentioned in past announcements, there is no funding impact in addition to what Kibo currently has for the development of the MCIPP power plant other than we may have to nominally increase our operational capacity to meet the additional operational [and] management demands for the development of two 300MW power plants.
"This is a real opportunity for a shorter and faster route to revenue generation; we look forward to updating shareholders on further progress soon."
At 1356 GMT, shares in Kibo Energy were up 6.33% at 0.48p.
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