Multi-asset energy company Kibo Energy is continuing to advance its portfolio of assets during the “unprecedented time” of the global fight against Covid-19, which is creating a changing landscape and having lasting implications that are still unknown at this stage.
It is within this context that CEO Louis Coetzee acknowledged in an April 8 letter to shareholders, that the need to achieve universal electricity access “has not changed” and remains essential, and is “arguably more critical” now than ever as a result of the pandemic that the world currently faces.
As such, he believes Kibo is positioned strongly when the world finds “a new normal” in which to operate following the outbreak of the coronavirus.
While the company’s focus remains on addressing acute power deficits in sub-Saharan Africa and, more recently, the UK, Kibo’s strategy has slightly altered to focus on including sustainable power options into its solutions.
This has seen Kibo build a strong partnership with US-based ESS Tech, which has resulted in Kibo making steady progress in integrating ESS’s iron flow battery technology, which more than doubles the operating lifetime and cycle capacity of lithium-ion battery storage systems, into its plans for its coal-fired power plants.
In Mozambique, Kibo’s Benga power plant project (BPPP), in which the company has a 65% interest and is backed by local energy company Termoeléctrica de Benga, the company continues to make progress.
With a definitive feasibility study (DFS) based on 150 MW coal-fired power plant already in place, the advanced project is reaching the next stage where, not only does it have significant expansion potential, but the offtake opportunities are escalating.
Kibo is continuing discussions with Electricidade de Moçambique (EDM) regarding a power purchase agreement (PPA).
Similarly, in Botswana, where Kibo is developing the Mabesekwa coal independent power project with energy industry player Shumba Energy, a strategic opportunity to develop a multiproject and multi-revenue stream programme has been identified.
This, Coetzee said, would comprise developing an established 761-million-tonne coal deposit into a coal mine that will feed two power stations.
The first of these is a 300 MW power station that is envisaged to provide power to Shumba’s petrochemicals plant, which will first provide Botswana with up to 80% of its domestic liquid and gas fuel requirements, and then later the Southern African market at large.
Kibo has a 35% interest in this project and the petrochemicals plant is supported by two major Chinese conglomerates.
The second is a 250 MW to 300 MW power station that is expected to feed into the Botswana power grid. Here Kibo has an 85% interest.
Completing the company’s African portfolio of assets is its wholly-owned Mbeya coal to power project (MCPP), in Tanzania. This project, which is fully developed to the funding- and construction-ready phase, comprises a 120-million-tonne coal deposit and a power plant between 300 MW and 600 MW.
MCPP also has seven mining licences and water permits in place.
“It too is making headway and remains an exciting opportunity,” Coetzee said, adding that Tanesco has confirmed that Kibo has the option to develop the project for the severely undersupplied power export market.
Tanesco is a Tanzanian parastatal organisation, and is an abbreviation for Tanzania Electric Supply Company.
Alongside this, Coetzee confirmed that Kibo was exploring opportunities within the domestic market.
Beyond Africa, although presenting in “a different shape and form”, the energy crisis is “just as critical”.
Completing its growth strategy, Kibo has identified the UK’s power deficit as a strategic development opportunity and intends to support the UK energy mix with much-needed flexible energy projects by developing a portfolio of small-scale power generation assets to support the UK power grid via its 60% interest in Mast Energy Developments’ projects.
To this end, the shovel-ready 5 MW gas-fuelled Bordersley power generation plant has been acquired and due diligence on several others are nearing conclusion, Coetzee noted.
The development of this power plant, however, has been progressing rapidly and ahead of schedule, but owing to unavoidable delays because of Covid-19, the company has had to place on hold planned construction and commissioning of the plant that was due to take place at the end of the first quarter in 2020.
“We are doing all we can to continue to progress this [project] and counter any further delays,” he said in the update, adding that Italian power giant AB Group continues to progress the project remotely.
The AB Group will supply, build and commission the Bordersley plant.
Kibo is using the temporary pause in activity at Bordersley as an opportunity to consolidate its ownership of Bordersley, which will allow it to progress uninterrupted with comprehensive ongoing funding discussions for MED and Bordersley.