Kibo Mining on 3 July announced a strategic development agreement with China’s Sepco III. The deal will see Sepco III make an initial investment in Kibo of 10-15% with an option to make a second investment of 5-10% within 18 months. Sepco III will have the right to be the sole bidder for engineering, procurement and construction (EPC) contracts at all of Kibo’s current and future projects. The agreement requires that outstanding conditions are met by 30 September.
Kibo intends to use the equity investment from Sepco III to fund its operations over the medium term to build up the company’s presence in East Africa. Kibo is currently developing three coal-to-power projects in Africa: Mbeya in Tanzania, Mabesekwa in Botswana, and Termoeléctrica de Benga in Mozambique, with Mabesekwa and Benga acquired this year.
“This is excellent news for Kibo on multiple levels: it is a major endorsement by one of the world’s largest power EPC contractors of both our portfolio and strategy aimed at alleviating the acute energy deficit in Africa; it provides us with short-to-medium cash stability; and it further strengthens our network of key partners and institutional investors to support us as we advance our portfolio of energy projects”, Kibo chief executive Louis Coetzee said.
“Crucially, Sepco III’s commitment of support significantly strengthens Kibo’s position in project development paths as well as future financing negotiations due to its international reputation and record of delivery of large scale utility energy projects globally”.
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