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(Alliance News) - Kibo Energy PLC on Thursday said significant progress is being made for its projects in Mozambique, with a power purchase agreement soon to be finalised with Baobab Resources Ltd.
Kibo said an advanced draft of a power purchase agreement with Baobab has been prepared and is expected to be finalised "expeditiously".
This is with regard to the supply of approximately 200 megawatts of energy to Baobab's Tete steel and vanadium project in Mozambique through Baobab's power plant project, 36km away from Benga.
The Baobab power project, together with Kibo's Benga power plant project, is being developed to produce approximately 350 megawatts to 400 megawatts as a base load of electricity.
A comprehensive integration study to assess the feasibility of a 400 megawatt combined project for the Baobab power project and Baobab's Benga power plant project has been completed.
An indicative engineering, procurement and construction price has been completed for the Baobab power project, for the purpose of agreeing commercial terms for the project.
The company said the original anticipated date for the finalisation of a power purchase agreement of September 30 has now been extended for a few weeks, and the company will keep shareholders updated on progress.
Kibo Energy Chief Executive said: "We continue to make significant progress with both our projects in Mozambique. The integration study and EPC review referred to above was done in record time by our consultants and EPC, despite extreme challenges amidst COVID-19 and we now look forward to completing the PPA in the coming weeks.
"The finalisation of this PPA with Baobab is an exciting and significant development for our company and we are firmly focussed on concluding the terms of this deal."
Kibo Energy shares were up 8.9% at 0.24 pence each in London on Thursday afternoon. In Johannesburg, they were untraded, last trading at ZAR0.07 each.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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