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Kibo Energy to reorganize Mabesekwa coal project ownership structure

Kibo Energy PLC signed a binding heads of agreement with Shumba Energy Ltd. to reorganize the ownership and management structure of the Mabesekwa coal mine and power project in Botswana.

The company said Sept. 25 that the move is expected to de-risk the project's coal resource, as it presents three different potential revenue streams, including an existing 300MW plant being advanced by two Chinese companies. Kibo Energy owns 85% of project holder Kibo Energy Botswana (Pty) Ltd., with Shumba owning the remaining 15%.

Under the terms, Kibo Energy will cut its stake in Kibo Energy Botswana to between 35% to 40% as the latter consolidates ownership of the 761-million-tonne mineral resource and studies for the proposed 300MW plant.

A new joint venture company will be established to allow Kibo and Shumba to continue operating Mabesekwa, with the two retaining their existing interests in the project.

Kibo Energy and Shumba will also jointly manage the development of a separate 300MW power plant by creating a new company, in which Kibo Energy will own up to a 40% stake.

Shamba will provide funds for the technical and feasibility studies for the new plant, which is intended to provide power to a petrochemical plant that will supply liquid and gas fuel to Botswana and, eventually, the southern African market.

It has been agreed that the coal from Masebakwa will supply the petrochemical plant, the new power plant and the existing Mabesekwa power plant, under several off-take deals.

The agreement is subject to the signing of a definitive deal, the execution of the offtake deals, and a longstop date of March 20, 2020.