Kibo signs MOU with TANESCO on Mbeya Coal to Power Project
AA – Kibo Mining Plc (AIM:KIBO; AltX:KBO), the multi-asset Africa-focused energy and resource company, is pleased to announce that the Company signed a Memorandum of Understanding (‘MOU’) with the Tanzania Electric Supply Company (‘TANESCO’) today, for the Power Purchase Agreement (‘PPA’) of the Company’s flagship 300MW Mbeya Coal to Power Project (‘MCPP’). The MOU constitutes the precursor to the finalisation of the PPA with TANESCO which is expected to be finalized as early as the end of Q1 2018, in accordance with the timeline previously agreed with TANESCO and the Ministry of Energy (‘the Ministry’).
In accordance with a pre-agreed commercial / technical / legal framework, the MOU sets out clear guidelines, deliverables and timelines for the conclusion of the PPA. The PPA will enable Kibo to move towards execution and conclusion of the final development phase of the MCPP, i.e. construction and commissioning. The Company hopes to complete funding arrangements for the construction and commissioning of the MCPP during H2 2018, after which Kibo believes it can be in production in 36 months, i.e. first electricity into the grid. Signing the MOU started an expedited PPA process that was previously agreed between TANESCO and the Ministry and reconfirmed during a meeting with the Hon. Minister for Energy on 02 February 2018.
MCPP is Kibo’s flagship project based in Tanzania, where the Company aims to build a 300MW mine-mouth power station to alleviate the acute energy deficiency in the country. The nationally important power project partners with global powerhouses like General Electric and the China-based Engineering Procurement and Construction (‘EPC’) partner SEPCO III.
Kibo’s CEO Louis Coetzee said: “This is a seminal moment for Kibo as a signed MOU signals the official engagement by TANESCO and the Ministry in the formal implementation of the MCPP and moves us to just one step away from finalizing the PPA. During the meeting with the Hon. Minister for Energy referred to above, the strategic national importance of the project was reiterated as well as the critical importance of seeing the project completed in less than 36 months if achievable. The Hon
Minister also informed the Company that the Ministry is taking proactive steps to ensure an expedited PPA process.
This welcome news follows a month of hard work by Kibo, who have made sure that all relevant stakeholders, especially our development partners, will be ready and in place to immediately commence with this final critical phase of the PPA process. We will continue to work closely with all the relevant parties and remain positive that the Ministry will honour its commitment to deliver a signed PPA by the end of Q1.”
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