Power purchase agreement for Tete Steel and Vanadium

Kibo Energy PLC, the multi-asset, Africa focused, energy company, has provided an update on its ongoing negotiations regarding a Power Purchase Agreement (PPA) with Baobab Resources to supply c.200MW energy to Baobab’s Tete Steel and Vanadium Project in Mozambique.

The Baobab Power Project together with the Company’s Benga Power Plant Project (BPPP) is being developed to produce c. 350MW – 400MW base load electricity. The following update is applicable:

• An advanced draft PPA has been prepared, which the Company will continue to work along with Baobab on, to expeditiously agree and finalize a final PPA;
• A comprehensive integration study to assess the feasibility of a 400 MW combined project for the Baobab Project and BPPP has been completed; and
• An extensive review by our preferred Engineering, Procurement and Construction Contractor (“EPC”) to provide an indicative EPC price for the purposes of agreeing commercial terms in the Baobab PPA has been completed.

These preparatory work elements which provide critical inputs to enable purposeful negotiation of a PPA agreement have been successfully completed over the last two months, despite the on-going travel and operational restrictions as a result of the on-going and resurgent Covid 19 situation.

Completion of the above referred preparatory work could however not be completed in time to also conclude PPA negotiations by 30 September 2020. The original anticipated date for the finalisation of a PPA of the 30 September 2020 has therefore now been extended for a few weeks. Louis Coetzee, CEO of Kibo Energy, commented: 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.”