Member Info for JDwag

Interestingly, that is one of the sticking points on the $30b LNG Project in Tanzania. The Government want International Arbitration written out of the agreement and the investors want it written in. JD

On a specific SPV point, O&W, SPVs do go bust / Investors walk away ufbthe losses start to mount up / Contractor’s go bust. Midland Metropolitan Hospital in Birmingham is a prime example, Contractor goes pop (Carillion) and the SPV Equity Holders saw less risk in walking away from their investment rather than to pay to finish the project with their own funds. The SPV PFI simply terminates a d it went back to the Treasury. Okay, would the Chinese State walk away in the event SEPCO got into financial trouble? Probably not. But there still is ‘risk’ in such projects and there most definitely is ‘risk’ in giving it to just one outfit (or its consortium parts). JD

Thing is Capo99, if you try and look at this from a TANESCO perspective I think they have ‘tendered’ this package in such away that it breaks up the ‘risk’ of putting all your eggs in one basket. Even the most bullish kiboite would admit from an energy suppliers perspective it doesn’t make a great deal of sense to allow one IPP too much power in a first round of tendering, for a few reasons, delays, contractors going bust, you name it on large scale investments such as this. I actually think that Tanesco have done a prudent thing here buy ensuring that (at least) two 300mw IPP providers emerge from this process. Shows a very logical approach from Tanesco. Of course, beyond Kibo and MCPP’s 300Mw, I honestly think the next best proposal will be years behind MCPP, so in the real world we will see how successful they are in getting other bidders. If you look at their 2025 energy plan for 5,000mw capacity then yes, you are looking at one of these every six months or so across the energy spectrum (Gas, Coal, Wind, etc). JD

Sadly goes on every day. The forwarded selling disgrace here (leading up to the Placing of 31st March 2014) was a masterclass in forward selling (prior to the placing) and the damage it can do.

Our SP went from 5p to 1.5p in a matter of months and it only repaired itself on the news flows in Nov and Dec of that year. It still grates at me to this day!

JD

Only as part of this procurement run, Mike. Who is to say if their economy motors along their isn’t another 600mw released next year as part of their 2025 energy plan?

JD

So basically it’s the same as this country when dealing with public procurement, you do a Pre-Qualification Questionnaire (PQQ) and that whittles down the masses to the serious tenders who get issued an Invitation To Tender (ITT) that goes into more detail.

But, yes, still doesn’t matter, feasibility study, financial model then getting the EPC Contractor (SEPCO), the Plant Manufacturer (GE) and the Facilities Manager on board (as Kibo has shown) will take 2/3 years and that is on the basis that you can even fund it (not a gimmie considering their current investor status) and it’s cost Kibo up front USD$25m+ just to get here.

It does leave you asking has Tanesco done this just to square off their procurement requirements only just to give it to Kibo anyway?

JD

That’s how I see it, Bespooked.

‘to undertake feasibility study, finance, build, own, operate and transfer coal power projects of a capacity not less than 150MW and not more than 300 MW in one location’

So who else can possibly pull this out of their backsides by 19 October in the next 22 business days and do it in a couple of years to boot?

At least 300mw is ours! It would take anyone competent at least 6 months to a year just to do an all bells and whistles feasibility study.

JD

That’s a good summation I think, Kyranos.

JD

Interestingly, listening to the Podcast again it would appear it’s not a widely circulate Pre Qualification Questionaire (PQQ) it appears to have only been circulated to companies with similarly advanced projects. No one is near Kibo in terms of a coal power plant progress. Of course, it may mean additional power (over and above MCPP) anyway. Strange old state of affairs. Either way we will get feedback shortly from Tanesco and their will be an RNS. JD

Bcl, with all due respect, how is that LC's fault, however?

As an example of how crazy it is in Tanzania, this is a country who has serious shortages of coal and the one coal mine still operational (which the TG own 30% i.e. the Tancoal Mine) hasn't had it's very simple Mining Licence issued in well over 2 years. Again, this is a part own government venture and it’s ground to a halt. I don't really see how you can expect a simple AIM CEO to change National Incompetence, do you?

His job is to keep steering the good ship Kibo until the TG see 'sense' and proceed with MCPP. Considering what he is dealing with and has dealt with over the these last two years in particular, I think he has done a magnificent job.

JD

Beyond all of this, in a country this disorganised withdrawing from international arbitration agreements and taking years to get even the most mundane Mining Licences approved, who the f*** is going to invest well north of a $1b dollars on a 600MW IPP for coal to gasification power plant? No Western money will go near this! Feasibility, permitting, funding and construction and commissioning, this project probably has the same timescales as Steigler’s Gorge lol.

JD

Google Vox Markets Podcasts. JD

Another come here to save the masses. BS! Your sniffing around here because you see a chance to make money. Just like me. JD

The latter. JD

‘Political risk mitigation’. You’ll struggle to get anything on the scale of MCPP built without the Chinese in tow in this part of the world. Coal gasification accounts for 5% off all power in China BTW. All of these plants will be Chinese built as they have all the experience of implementing the technology. It’s a geopolitical power play this make no mistake. I also still see SEPCO3 buying in at end of this month, and no doubt at a bargain price!! JD

Me either.

JD

Can anyone locate the TANESCO tender request?

JD

http://www.tanesco.co.tz/index.php/procurement/current-tenders

Reading the TANESCO tenders portal this morning it looks like a few invitation to tenders have been released today (however, I can’t see the Coal Gasification one though?). Overhaul of an existing Hydropower Plant and new capacity of 200MW and 150MW of Wind and Solar respectively over the next 2 to 3 years.

Now depending on the size of the proposed Coal Gasification Plant? I can’t see how this affects MCPP? If the original 5,000MW of installed generation is to be believed (as per the 2025 energy plan) the surely MCPP still makes part of this up?

As ever with KIBO it’s a waiting game to see how it pans out, but considering how long a coal gasification plant of any size would take to plan and build we have to be talking 5+ years to get this on line and into the grid surely and that is on the basis that the TG have the money for this?

More puzzled now by that RNS than anything, especially when our CEO states this morning:

https://www.miningmx.com/trending/34364-kibo-to-mull-further-opportunities-in-tanzania-after-utilitys-tender-call/

‘Louis Coetzee, CEO of Kibo Energy, said in an announcement to the Johannesburg Stock Exchange that his initial impression of the announcement is that it would provide additional opportunities for the firm, rather than imperil the current one.’

Anyway, I’ve thrown another £1k on the fire as I think this is overdone and the implications will not be of any eventual consequence to us.

JD

As another simple bureaucratic loophole to go though. There is clearly more of a coordinated approach here when taken in tandem with the legislation issued yesterday in taking Tanzania out of the international arbitration system. Let’s be frank, they are purposely trying to weed out those they can and can’t do business with. As I posted yesterday this is a country that is now a no go zone unless you have the necessary geopolitical muscle behind you, and by that I mean the Chinese State. Out of all the IPP we are excellently placed still, just a waiting game, and unfortunately we are excellent at that..... JD

Completely agree, Xerxes. JD