Kibo Energy has concluded its due diligence regarding the agreement with South Africa-based IGES to jointly develop a portfolio of Waste to Energy projects in South Africa. These projects, which aim to address the insecure energy supply environment in the country by enabling industries to operate independently, will convert plastic waste provided by leading waste disposal operators into syngas using Pyrolysis Technology; the syngas will then be stored on site and fed into gas engines to generate electrical power.
A Newco will be established, in which Kibo will hold 65% for an Equity Loan contribution of R11,145,000, that will be used to develop the first 8 megawatts (“MW”) project in several phases and IGES will hold 35% for an equity contribution valued on the basis of a seven-project development portfolio and development expenditure to date. Newco has an initial target of generating more than 50 MW of electricity for sale to industrial users.
RENEWABLE ENERGY STRATEGY
The Directors believe that clean coal-fuelled power projects will continue to be necessary for a transitional period of some decades to support Africa’s rapidly increasing energy requirements. The Company has therefore been developing three utility scale, coal-fuelled power projects, located in Tanzania, Botswana, and Mozambique.
While these integrate several clean coal technologies such as carbon capture and storage and the latest Circulating Fluidized Bed and flue gas desulphurisation technologies, the Company has also explored renewable energy opportunities for several years to incorporate into the longer-term growth plans of these assets, or as standalone projects.
Since early 2020 and the onset of the Covid-19 global pandemic, the renewable energy drive has gathered pace with governments worldwide pledging to reduce the reliance on carbon fuels within their energy strategies.
With this background, the Company undertook a review of operations to establish the best way to extract the substantial value it had created in its coal-fuelled projects for shareholders. Accordingly, the Company has decided to pursue a renewable strategy and dispose of its coal-fuelled power projects; advisors will be appointed in due course to oversee this process.
The joint venture with IGES mentioned above will form the initial core to the Company’s new strategy, however, it anticipates that additional acquisitions/investments in the renewable sector will be made to further strengthen this portfolio.
The South African government’s recent announcement to allow private investors to establish up to 100 megawatts of generating capacity without requiring a license/ permit provides further impetus in this regard and will bring along significant new opportunities. Further updates will be made as appropriate.