Kibo Energy PLC, previously Kibo Mining PLC, signed a memorandum of understanding for the acquisition of a 60% interest in Mast Energy Developments for £300,000 in shares and further shares equivalent to £2.2 million once project revenue royalties are generated.
Mast is a private U.K.-registered company that develops and operates reserve power generation plants. Its first asset under acquisition in the U.K. is expected to be up and running in 12 months, which means there is potential for Kibo to have a revenue stream in the short term.
Kibo is developing the Mabesekwa and Mbeya coal-to-power projects in Botswana and Tanzania, respectively, and the Mast acquisition is in line with its stated goal of becoming a regional power player in Africa.
Kibo will have the right to appoint two nonexecutive and two executive directors to Mast's board, while Mast will have the right to appoint two executive directors and one nonexecutive director.
Additionally, both companies will grant each other the option to acquire or sell the remaining 40% of Mast within 60 days of the generating asset portfolio reaching 150 MW.
CEO Louis Coetzee said in a statement, "This prospect of receipt of gradually increasing revenue streams in the short term as [Mast Energy Developments] builds generating capacity and the re-investment of royalties in the early stages of production will greatly assist the company's working capital requirements as it develops its rapidly expanding larger scale energy asset portfolio in Africa. Additionally, it creates a situation where we can expand our product offering and increase our exposure to different sectors of the African energy market."