Kibo Energy Regulatory News (KIBO)

Kibo Energy PLC (Incorporated in Ireland)

(Registration Number: 451931)

(External registration number: 2011/007371/10)

Share code on the JSE: KBO

Share code on the AIM: KIBO

ISIN: IE00B97C0C31

("Kibo" or "the Group" or "the Company")

Unaudited Interim results for the six months ended 30 June 2022

Dated 23 September 2022

Kibo Energy PLC ('Kibo' or 'the Group' or 'the Company') (AIM: KIBO; AltX: KBO), the renewable-energy-focused development company, is pleased to announce its unaudited results for the six months ended 30 June 2022. The interim results are also available on the Company's website: https://kibo.energy/wp-content/uploads/Kibo-Interim-ResultsJune-2022.pdf

Highlights

· Continued focus on the Company's revised renewable energy strategy in order to align with global requirements:

o Entered a 10-year take-or-pay conditional Power Purchase Agreement ('PPA') to generate base-load electricity from a 2,7 MW plastic-to-syngas power plant. The project is the first under Sustineri Energy (Pty) Ltd ('Sustineri Energy' or 'Sustineri'), a joint venture ('JV') in which Kibo holds 65%, with the balance of 35% held by Industrial Green Energy Solutions (Pty) Ltd ('IGES')

o Signed a rolling five-year Framework Agreement ('FA') with Enerox GmbH ('CellCube') to develop and deploy Long Duration Energy Storage ('LDES') solutions in selected target sectors in the Southern African Development Community ('SADC') countries. The agreement grants Kibo exclusive rights to the marketing, sales, configuration and delivery of CellCube solutions, subject to successful Proof of Concepts ('POCs'), within the target sectors

o Acquired 51% of National Broadband Solutions ('NBS') to jointly assess and develop a portfolio of LDES projects held exclusively by NBS in South Africa, with an initial target of c. 36,320 MWh capacity

o Intention to dispose of original coal assets in accordance with an approved disposal strategy that will realise value for shareholders

o Proceeded with further test work to identify a suitable clean/renewable energy fuel source, based on test results to date, with the aim of converting the Company's existing energy projects in Tanzania, Botswana and Mozambique to clean/renewable energy projects

· Appointed Mr Cobus van der Merwe as Group Chief Financial Officer ('CFO') with effect from 1 June 2022

· Confirmed the appointment of former Group CFO, Mr Pieter Krügel as Chief Executive Officer ('CEO') of Kibo subsidiary, Mast Energy Developments PLC ('MED'), with effect from 1 June 2022

· As previously announced, Christian Schaffalitzky, the current Chairman of the Board, will step down on conclusion of the adjourned AGM

· Appointed Shard Capital Partners LLP as a joint broker to the Company with immediate effect, to act alongside the Company's current broker Hybridan LLP and the Company's nominated advisor RFC Ambrian Ltd

· Settled outstanding fees owed to directors and management through the issue of a convertible loan note ('CLN') instrument

· Signed a bridging loan facility agreement with an institutional investor for up to £3 million with a term of up to 36 months and an initial drawdown of £1 million available immediately. Funds advanced under the facility will attract a fixed coupon interest rate of 3,5%, repayable with accrued interest four months after the drawdown

· Post-reporting period:

o  Successfully achieved the first CellCube FA target with a commitment to purchase the first three POC projects

o  Extended its conditional PPA of 10 years to 20 years for the Company's first South African waste-to-energy ('WTE') project as part of the Sustineri Energy JV with IGES

o  Increased Kibo's interest in MED from 55,42% to 61,27%, following the receipt of MED shares as partial settlement of outstanding shareholder loan amount

o  Initiated a process of Requests for Proposals ('RFPs') to investigate the feasibility of replacing fossil fuel (coal) with renewable biofuel, specifically regarding the operations and assets wherein the Company determined to dispose all its coal assets while retaining the associated energy (power) projects and maintaining/adding value for shareholders

o  Proceeded with a signed definitive agreement to acquire 100% interest in a waste gasification and power plant in the United Kingdom as part of its UK WTE portfolio

Chairman's Statement

Introduction

Following the announcement in last year's interim results for the six months ended 30 June 2021, that Kibo Energy ('Kibo' or 'the Company') had begun the process of pivoting its business to the acquisition and development of a portfolio of sustainable, renewable energy assets to capitalise on the global clean energy revolution, I am pleased to report that the Company's continued commitment to its renewed strategy in this regard has yielded positive results. As part of Kibo's refocused strategy centred around renewable energy development, the Company has acquired a waste gasification and power plant in the United Kingdom as part of its UK WTE portfolio. We believe this opportunity supports our strategic intent to significantly advance and accelerate the development of the Company's renewable energy portfolio in the UK.

In South Africa, we are excited to have signed our first WTE Power Purchase Agreement ('PPA') to generate base-load electricity over 10 years from a 2,7 MW plastic-to-syngas power plant, which aligns with our clean energy strategy. The project initiates a pipeline of projects under the Company's South African WTE portfolio with our partners, Industrial Green Energy Solutions (Pty) Ltd ('IGES'). During the PPA process, the Company also performed a large amount of work to procure funding for the project and has received a higher-than-expected level of interest for the provision of project and debt funding at very competitive commercial terms from various institutions.

The growing energy market in the Southern African Development Community ('SADC') countries, particularly the energy-starved South Africa, makes the case for energy storage more viable. Further to the Company's strategy to implement long-duration energy storage ('LDES') solutions we are delighted to have signed a five-year Framework Agreement ('FA') with Enerox GmbH ('CellCube') to develop and deploy LDES solutions in the SADC countries (RNS dated 17 May 2022). The development of a large project pipeline ready for immediate execution is the main pivot on which the FA hinges.

These smaller-scale renewable energy projects are focused on the UK and Southern Africa as the market opportunities, government support and technical innovation in these countries is slowly evolving and at the ideal stage to position Kibo as an influential innovator in the sector. This is most evident in Kibo's large knowledge base of and experience in the renewable energy sector, developed in recent years through its renewable energy and LDES solutions for integration with and repositioning of its current large utility fossil fuel-based projects.

The past few months have seen considerable progress across Kibo's renewable and sustainable energy strategy. Following the RNS dated 16 June 2021, in which Kibo announced an extensive review of operations and assets, the Company decided to dispose of all its coal assets while retaining the associated energy (power) projects through its introduction of innovative biofuel technology to its arsenal of solutions. By undertaking an evidence-based process of test and evaluation on the biofuel technology, we believe, subject to confirmatory test work, replacement of conventionally mined coal with a 100% renewable energy source is possible. Work completed to date indicates that our existing coal-fired power plant designs can be adapted, with minor design changes, to accept the new renewable fuel solution. All current and future projects across the Kibo Energy portfolio as well as its investment holdings have been extensively reviewed and realigned with the Company's renewed strategy to focus on renewable, sustainable energy solutions while retaining maximum value for Kibo and its shareholders as well as remaining attractive for acquisition, funding and construction by potential purchasers.

As progress continues on Kibo's portfolio of projects, the Company has further invested in its management team with the appointment of Mr Cobus van der Merwe as Chief Financial Officer ('CFO') as of 1 June 2022 (RNS dated 20 May 2022). Van der Merwe brings a wealth of experience to the team as a registered Chartered Accountant (South Africa) and having previously held managerial and executive roles in the investment management and energy, utilities and resource sectors. Most notably, he held a senior management position at PricewaterhouseCoopers, servicing clients across the United Kingdom, Ireland and Africa, as well as the position of Partner and Chair of the Investment Committee at PSG Wealth, where he managed bespoke investment portfolios for high net-worth individuals. The Company also confirmed the appointment of Mr Pieter Krügel to Chief Executive Officer ('CEO') of Mast Energy Developments ('MED') as of 1 June 2022. Krügel previously held the position of Group CFO at Kibo Energy for four years.

I firmly believe that these new appointments, as well as the focus on the Company's renewable, sustainable energy strategy, will play an integral role in delivering the Company's growth strategy while placing Kibo Energy in an advantageous position within the alternative energy sectors in the UK and sub-Saharan Africa, where the majority of the Company's investments are held.

Conclusion

As we move forward into the second half of 2022, despite the ongoing war in Ukraine, rising inflation and increased interest rates adding to uncertainty across industries, I am pleased to report that economic activity remains high, and this has yielded positive results for Kibo in terms of the development of its ongoing and new projects in the first half of 2022. The Company intends to further streamline its operations with a primary focus on the acquisition and development of its alternative and renewable, sustainable energy solution projects, many on which we have already made considerable progress while staying committed to the disposal and conversion of our large-scale fossil fuel-based utility projects.

Kibo's knowledge, experience and developments in this area are at an advanced stage in comparison to the sectors in the regions the Company operates. Therefore, as technologies within the alternative and renewable energy sectors evolve to include small-scale bespoke alternative and renewable energy solutions, Kibo will remain at the forefront in providing an attractive opportunity for potential investors.

Christian Schaffalitzky

Executive Chairman

Unaudited Interim Results for the six months ended 30 June 2022

Unaudited Condensed Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 June 2022

Unaudited Condensed Consolidated Interim Statement of Financial Position

As at 30 June 2022

Unaudited Condensed Interim Consolidated Statement of Changes in Equity

Unaudited Condensed Consolidated Interim Statement of Cash Flow

For the six months ended 30 June 2022

Notes to the unaudited condensed consolidated interim financial statements

For the six months ended 30 June 2022

1. General information

Kibo Energy PLC is a public company incorporated in Ireland. The condensed consolidated interim financial results consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The Company's shares are listed on the AIM Market ("AIM") of the London Stock Exchange and the Alternative Exchange ("AltX") of the Johannesburg Stock Exchange ("JSE") Limited. The principal activities of the Company and its subsidiaries are related to the development of renewable energy projects in Southern Africa and the United Kingdom.

2. Statement of Compliance and Basis of Preparation

The unaudited condensed consolidated interim financial results are for the six months ended 30 June 2022, and have been prepared using the same accounting policies as those applied by the Group in its December 2021 consolidated annual financial statements, which are in accordance with the framework concepts and the recognition and measurement criteria of the International Financial Reporting Standards and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council issued by the International Accounting Standards Board ("IASB"), including the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, IAS 34 - Interim Financial Reporting, the Listings Requirements of the JSE Limited, the AIM rules of the London Stock Exchange and the Irish Companies Act 2014.

These condensed consolidated interim financial statements do not include all the notes presented in a complete set of consolidated annual financial statements, as only selected explanatory notes are included to explain key events and transactions that are significant to obtaining an understanding of the changes throughout the financial period, accordingly the report must be read in conjunction with the annual report for the year ended 31 December 2021.

The comparative amounts in the consolidated financial results include extracts from the consolidated annual financial statements for the period ended 31 December 2021.

These extracts do not constitute statutory accounts in accordance with the Irish Companies Acts 2014. All monetary information is presented in the presentation currency of the Company being Pound Sterling. The Group's principal accounting policies and assumptions have been applied consistently over the current and prior comparative financial period.

3. Use of estimates and judgements

Preparing the condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2021.

4. Loss per share

Basic, dilutive and headline loss per share for the six months ended 30 June 2022 are as follows:

Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary shares in issue during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as required by Circular 1/2021 issued by the South African Institute of Chartered Accountants (SAICA).

5. Called up share capital and share premium

Authorised ordinary share capital of the company is 5,000,000,000 ordinary shares of €0.001 each.

Authorised deferred shares of the company is 1,000,000,000 of €0.014 and 3,000,000,000 of €0.009 respectively.

Detail of issued capital is as follows:

The company issued the following ordinary shares during the period, with regard to key transactions:

- 39,264,079 new Kibo Shares were issued on 16 February 2022 of €0.001 each at a deemed issue price of £0.0017828 per share to an Institutional Investor ("Investor") in settlement of £70,000 of facility implementation fee pursuant to the Funding Facility Agreement signed between the Investor and the Company in February 2022;

- 13,157,895 new Kibo Shares were issued on 16 February 2022 of €0.001 each at a deemed issue price of £0.0019 per share to certain providers of financial and technical services in settlement of £25,000 of outstanding invoices;

- 56,118,047 new Kibo Shares were issued on 20 May 2022 of €0.001 each at a deemed issue price of £0.0016 per share to Sanderson Capital Partners Limited in full and final settlement of £89,788.88 of the total remaining outstanding amount owing pursuant to the Forward Payment Facility; and

- 168,274,625 Company warrants to subscribe for 168,274,625 new Kibo shares under the terms of warrants announced on the 16th of February 2022.

6. Segment analysis

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specific criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision-maker.

The Chief Executive Officer is the chief operating decision maker of the Group.

Management currently identifies individual projects as operating segments. These operating segments are monitored, and strategic decisions are made based upon their individual nature, together with other non-financial data collated from project and exploration activities. Principal activities for these operating segments are as follows:

8. Intangible assets

Intangible assets are not amortised, due to the indefinite useful life, which is attached to the underlying prospecting rights, until such time that active mining operations commence, which will result in the intangible asset being amortised over the useful life of the relevant mining licences.

Intangible assets with an indefinite useful life are assessed for impairment on an annual basis, against the prospective fair value of the intangible asset. The valuation of intangible assets with an indefinite useful life is reassessed on an annual basis through valuation techniques applicable to the nature of the intangible assets.

As at reporting period end, taking into account the various applicable aspects, the Group concluded that none of the impairment indicators had been met in relation to the Mbeya Coal to Power Project, Bordersley Power Project, Rochdale Power or Sustineri Energy.

9. Goodwill

MAST Energy Projects Limited - 2020

During the 30 June 2021 period, the Group acquired a 60% equity interest in MAST Energy Project Limited, previously known as MAST Energy Development Limited, for £300,000, settled through the issue of 5,714,286 ordinary shares in Kibo Energy plc effective on 19 October 2018. The acquisition of MAST Energy Projects Limited falls within the ambit of IFRS 3: Business Combinations.

The net assets acquired were valued at Nil, with the resultant purchase price being allocated to Goodwill on date of acquisition. Goodwill is assessed for impairment on an annual basis, against the recoverable amount of underlying Cash Generating Unit ("CGU"). The recoverable amount of the CGU is the higher of its fair value less cost to sell and its value in use.

Because the underlying projects previously held by Mast Energy Projects Limited have now been restructured into separate SPV's, controlled directly by the intermediary holding company Sloane Developments Limited, there was no prospective benefit from continued operations of Mast Energy Projects Limited therefore the goodwill was impaired. The Company will cease operations in the foreseeable future.

10. Investment in associates

The value of the equity interest in Kibo Energy Botswana (Pty) Ltd was determined based on the fair value of the proportionate equity interest retained in the enlarged resource following the restructuring in the prior period.

As at reporting period end, taking into account the various applicable aspects, the Group concluded that none of the impairment indicators had been met in relation to the Mabesekwa Coal Independent Power Plant project.

11. Other financial assets

12. Borrowings