Kibo Energy has received formal notice from TANESCO inviting it to develop the Mbeya Coal to Power Project for the export market.
This enables Kibo to engage with the African Power Pools regarding off-take agreements.
As per the announcement dated 8 March 2019, the Mbeya Coal to Power Project (MCPP) remains a bankable project, fully developed up to bankable feasibility stage, with a potential generating capacity of 1000 MW; multiple opportunities exist for the project including three distinct markets: utility, export and private off-take.
The existing acute under supply of power within Tanzania and the Southern Africa region, means that there is an urgent demand for electricity and given that Tanzania has a target to deliver approximately 880 MW for the export market for the period 2020-2040, the MCPP is perfectly positioned to help meet this demand.
TANESCO has advised Kibo that it is currently implementing inter-connectors through Zambia, Tanzania and Kenya enabling power trade within the Eastern African Power Pool and Southern African Power Pool member countries.
TANESCO has recommended that Kibo engage these Power Pools to ensure participation in the high demand export market.
Furthermore, Kibo also remains engaged with TANESCO, regarding potential energy supply opportunities to the domestic market.
Louis Coetzee, CEO of Kibo Energy, comments, “Our recent correspondence with TANESCO further consolidates our belief that the MCPP continues to have significant economic and strategic importance for the Company, Tanzania and the region.
"The project is located close to potential private off-take partners with whom the company has already engaged on their significant off-take requirements and TANESCO’s active development of the inter-connectors brought into play the clear and definite short-term potential for Kibo to actively participate in the growing power export markets.
In addition to engaging potential local private off-take partners, the company have also initiated contact with the various power pools referred to above.
"Our recent appointment of Wimmer Financial LLP, to manage the structuring and provision of a project finance corporate credit line facility of up to USD 900 million, will help to secure our debt requirements for all our African energy projects and forms an important part of our adjusted strategic focus for the MCPP.
It is also important to note that the initiative referred to above is not subject to any TANESCO tender process / procedure and entirely unrelated and independent from the tender referred to in the RNS of 14 February 2019 and the clarification request mentioned therein.
"I look forward to updating shareholders with details of our progress on the MCPP power off-take market development and on development progress across our portfolio during this very busy time for the company.