Renewable energy development company Kibo Energy has signed a definitive share purchase agreement (SPA) to acquire a 100% interest in a waste reception, anaerobic digestor (AD) and combined heat and power (CHP) power plant named Southport at Merseyside, in the UK.
The company said on September 21 that the acquisition of the 12 MW waste-to-energy project was in line with its refocused strategy to acquire and develop an energy portfolio centred on sustainable, renewable and clean energy solutions and opportunities.
Kibo will acquire 100% of the total issued share capital of Shankley Biogas, which is developing the project and will be responsible for the construction and operation thereof.
Southport comprises an 80 000 t waste reception centre, with AD technology that is set to produce 5.5-million cubic metres a year of biomethane, with a 10 MW installed CHP plant plus a planned 2 MW of battery storage.
The project rights include all technology licence agreements, equipment supply and maintenance agreements, as well as related project documentation.
The transaction consideration is £600 000, comprising £350 000 worth of ordinary shares in Kibo and £250 000 in cash, payable in three tranches.
Shankley has negotiated a power purchase agreement and a gas purchase agreement term sheet on favourable terms with a blue-chip buyer.
The project has full planning permission, as well as grid and gas connection points already in place.
Based on independent financial estimates, the projected valuation metrics for the project include an internal rate of return of about 22.78%, a 6% net present value of about £47-million, a net asset value of about £22-million, a projected average yearly revenue of about £24-million over a 25-year term, an estimated operating margin of about 38% and capital estimated at about £35-million.
“We believe this opportunity supports our strategic intent to significantly advance and accelerate the development of the company’s renewable energy portfolio in the UK.
“The project further deliberately and actively drives Kibo’s transition from fossil fuel-based energy solutions to sustainable renewable energy solutions and will now bring our waste-to-energy portfolio to an aggregate of about 140 000 MWh/y, with this entire capacity expected to go into production over the next 12 to 18 months,” Kibo Energy CEO Louis Coetzee said.
He added that the company also expected to further advance its renewable and clean energy portfolio with the ongoing work related to converting its existing energy projects in Tanzania.
“This is indeed an exciting new chapter in the business, one that aligns with the UK’s move to an electricity system that is secure, affordable and employs increasing amounts of variable renewable energy generation options,” Coetzee said.