JSE-listed Kibo Energy has signed a binding term sheet with an investment consortium consisting of several high net worth entities and individuals, including two of the company’s largest shareholders, for up to £1-million.

The £1-million will be used to continue development of a diverse energy project portfolio comprising 1 255 MW of electricity generation capacity approaching commercialisation.

The primary focus is on the Benga independent power project in Mozambique, where Kibo hopes to deliver 350 MW to 400 MW.

Kibo is on track to finalise a power purchase agreement (PPA) with Baobab Resources at the end of September. Kibo is looking to supply energy to Baobab’s Tete steel and vanadium project in Mozambique.

The company noted that it had continued productive engagement with Mozambique State-owned electric utility Electricidade de Mocambique with a PPA planned to be finalised before the end of this year.

It also noted progress in the UK where it is advancing various funding and commercial opportunities and anticipates bringing Bordesley into production before the end of the year.

The company has also made headway in Tanzania, where it is awaiting further guidance from authorities regarding a new tender for coal fired power projects.

Also, the board and management of Kibo have agreed a 40% pay cut for the next three months.

“Following the recent extraordinary general meeting, some of the major shareholders in Kibo entered into discussions with the company regarding the projects that Kibo has within its portfolio and the costs associated with the further development of these.

"These discussions delivered strong support for the Kibo project portfolio and development strategy, culminating in the funding term sheet set out below,” Kibo CEO Louis Coetzee said.

“With the knowledge that we have the support of the majority of our shareholders, and the strong belief we have in the exciting potential that our diverse portfolio of energy assets offers, we are pleased to announce this £1-million term sheet.

This compelling endorsement from a consortium of highly experienced investors/existing long-term shareholders, will enable the continued development of our projects, which are all approaching commercialisation,” he added.

He highlighted in particular that the company’s project in Mozambique is making vast strides forward, where it realistically expects the delivery of two PPAs before the end of 2020 for up to 400 MW; at the start of this year its expectation was for one PPA for 150 MW.