Kibo signs development agreement with Sepco III
Aim-listed Kibo Mining has signed a strategic development agreement (SDA) with China-based Sepco III to work towards enhancing Kibo’s strategy and the development of its portfolio of energy projects.
As part of the SDA, Sepco III has committed to a two-stage equity investment in Kibo.
Sepco III has committed to acquiring an initial direct equity investment of between 10% and 15% of Kibo's issued share capital for a cash price to be agreed between the two parties.
Additionally, Sepco III has the option, at its sole discretion and within 18 months from completion of the first direct equity investment, to make a second direct equity investment in Kibo of a further 5% to 10% of Kibo's issued share.
As part of the SDA, Sepco III has, subject to completing the first equity investment, the right to become the sole bidder for the engineering, procurement and construction (EPC) contract in respect of all Kibo's existing and future energy projects anywhere in the world.
The SDA, Kibo CEO Louis Coetzee said, is a major endorsement, by one of the world’s largest EPC contractors, of both Kibo’s portfolio and strategy.
He explained that the SDA provides the company with short to medium term cash stability, and that it further strengthens Kibo’s network of key partners and institutional investors to support the company as it advances it portfolio of energy projects.
“Crucially, Sepco III’s commitment of support significantly strengthens Kibo’s position in project development paths, as well as future financing negotiations owing to its international reputation and record of delivery of large-scale utility energy projects globally”.
The SDA is the fruit of many months of negotiating with Sepco III, which Coetzee said recognises Kibo’s position as a bridgehead into the African energy arena.
“We look forward to strengthening and deepening our longstanding working relationship with the Sepco III team and to building a leading position in the African energy sector together,” he noted.
Kibo is developing the Mbeya coal-to-power project, in Tanzania; the Mabesekwa coal independent power project, in Botswana; and has entered into a joint venture agreement with Mozambique energy company Termoeléctrica de Benga regarding the development of the Benga independent power project, in Tete, Mozambique.
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