Kibo mulls renewables cogeneration opportunities

24th June 2019 By: Simone Liedtke - Writer

In line with its strategy of incorporating long-term renewable energy solutions into its existing coal power projects, Africa-focused Kibo Energy has signed a collaboration agreement with ESS Tech to develop suitable baseload electricity storage solutions.

Having recognised the increasing need to generate reliable, sustainable, cost-effective and efficient electricity, the parties will actively develop energy storage solutions, which will initially focus on Kibo’s Mbeya coal-to-power project (MCPP), in Tanzania; its Mabesekwa coal independent power project, in Botswana; and its Benga power plant project, in Mozambique, with the possibility of expanding this collaboration into new opportunities in the future.

Under the terms of the agreement, ESS will provide Kibo with technical advice and support for its feasibility and related studies, while also collaborating with Kibo to actively develop, create and facilitate new project opportunities and working with Kibo on securing funding and creating funding opportunities for the various projects.

ESS will also assist Kibo in its efforts to secure power purchase agreements (PPAs) and to socialise the projects with related governments and appropriate authorities and stakeholders while also providing information to the owner’s engineer (OE) to maximise required plant technical specifications and performance and, where applicable, to OE costs payable by Kibo.

It will also provide designated project stakeholders access to selected ESS technical material related to storage technology equipment and be the preferred electricity storage technology partner to Kibo for the projects.

Kibo CEO Louis Coetzee on Monday said "the inclusion of renewable energy into power station designs allows for higher availability figures from a technical point of view and provides better fundability options”.

With this in mind and given that storage capacity is an essential component of realising renewable energy in baseload applications, Coetzee said Kibo was “delighted to have access to ESS's technology”, which opens up new avenues for the company in terms of renewable cogeneration for its coal power projects.

Meanwhile, the dual-listed energy company on Monday also reported a loss of just over £4-million for the year ended December 31, 2018.

Citing 2018 as a “transformational year”, Kibo chairperson Christian Schaffalitzky said the country diversification offered by the company’s current African project portfolio was strategically positioned to help insulate it against sovereign risk, while also granting it the opportunity to participate in the opportunity arising from sub-Saharan Africa’s urgent and increasing demand for reliable, sustainable and affordable electricity.

Kibo's projects were positioned to address these concerns, he said, adding that the company remained focused on navigating the intricate agreements needed to bring them to commercialisation and maintaining good relationships with the various governments and international organisations that were vital to their continued progress.

“Through our experience on the project development path for the MCPP in Tanzania, we have established and strengthened key relationships and collaboration agreements with international energy development, engineering and financial firms such as Sepco III, General Electric and Absa,” Schaffalitzky commented.

He further pointed out that Kibo’s diversification strategy had proved particularly prescient in February, with the disappointing news that the MCPP had not qualified as one of the preferred applicants for the delivery of thermal coal power in Tanzania under a Tanesco tender round, delaying the construction of the project.

“While we strongly anticipated that the MCPP would be the first of our projects to be constructed, it is now on hold as we explore alternative options for it.”

The company is awaiting clarification from Tanesco as to why its bid failed, despite repeated assurances that the MCPP was an integral part of Tanzania’s plans for increased power capacity in the country, including a signed memorandum of understanding in place for the negotiation of a PPA between Tanesco and Kibo.

“There is still much uncertainty on what solutions will emerge to address Tanzania's electricity shortages, but the situation is dynamic and Kibo is well placed to be part of the mix at the appropriate time. What is certain, however, is the urgent demand for electricity and particularly substantial baseload power generation in the country in the short term,” Schaffalitzky averred.

However, the company had received confirmation from Tanesco that it could develop the MCPP for the export market.

Meanwhile, the company is making progress at its Benga project, with government support and a feasibility study completed and submitted to the Ministry of Mineral Resources and Energy and Electricidade de Moçambique ahead of schedule.

Kibo’s focus is now on finalising a coal supply agreement and PPA with private offtakers.

The Mabesekwa project also presents an exciting opportunity for Kibo and its shareholders. With a mining scoping study complete, the company is now progressing a feasibility study and waiting for a mining licence for the coal mine.

Looking ahead, Schaffalitzky said Kibo remained focused on delivering its objective to build a leading multi-asset energy company and realising value from its four projects, which it anticipates will play major roles in the provision of energy to a variety of power-constricted markets.

“With our long-established international relationships, including the project financing agreement announced post period end with Wimmer Financial, we are well positioned to rapidly move onto the construction phases once we have, among other things, completed our already advanced PPA discussion,” Schaffalitzky commented.