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Kibo Energy has signed an agreement with Shumba Energy to reorganise the arrangements for the Mabesekwa Coal Independent Power Project (MCIPP) and its associated coal asset in Botswana.

Kibo and Shumba hold 85% and 15% interests respectively in Kibo Energy Botswana (KEB), the company currently holding the MCIPP which consists of:

  • 761 Mt coal Mineral Resource held entirely within KEB, with KEB having right to a 303 Mt subset, and Shumba retaining rights over the balance
  • studies investigating the construction of a 300 MW integrated power project at Mabesekwa; and certain water and land use permit and environmental certification in place

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Under the reorganization the MCIPP Retained Assets will be consolidated back into KEB and Kibo’s interest in KEB will be reduced to 35% to 40% to maintain Kibo’s look-through interest in the MCIPP

Resource and make sundry adjustments to recognise Kibo’s project expenditure.

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An additional JV to be incorporated between Kibo and Shumba will enable continuation of the advancement and operation of the existing MCIPP energy projects in Botswana.

Kibo, Shumba and their respective subsidiaries will retain their existing interests in the MCIPP (Kibo 85%) and the existing

shareholder agreement between them to govern their joint venture and shareholder interests, including the protection of minority interests.

As part of this reorganization the relationship between Kibo and Shumba will be expanded to include jointly managing and overseeing the development of a bespoke 300 MW power station through the incorporation of a new company to be held 35%-40% by Kibo and the balance by Shumba.

Shumba would provide the full development funding requirement for associated feasibility and technical studies.

The KP1 Power Plant is in addition to the MCIPP and envisaged to provide power to a Petrochemical plant (PCP) that will provide first Botswana, with up to 80% of its domestic liquid / gas fuel requirements, and later the Southern African market at large.

Louis Coetzee, CEO of Kibo, comments, “This reorganization enables us to more fully leverage and de-risk the MCIPP Resource by pursuing three different potential revenue streams, including a further 250 – 300 MW power plant in addition to the existing MCIPP 300 MW plant currently being advanced and significant exposure to a large PCP to be planned for development and supported by two major Chinese conglomerates.

“With the strong local and international support, and supply agreements already in place, we are exposed to a much larger opportunity in addition to what we are already developing in Botswana, further strengthening our existing relationship with Shumba.

“Recent emphasis has been on our major other projects, including the MCPP in Tanzania, Benga in Mozambique, and Mast Energy in the UK, where notable advances have been made. Now the spotlight is on Mabesekwa; this is a tipping point for the project, which we believe offers a significant value – lift to shareholders.