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Kibo signs SDA with China's SEPCOIII

Kibo Mining (AIM:KIBO) and China-based SEPCOIII have signed a strategic development agreement, with the latter committing to a two-stage equity investment to fulfil Kibo’s capital requirements in the short-to medium-term.
Kibo signs SDA with China's SEPCOIII Kibo signs SDA with China's SEPCOIII Kibo signs SDA with China's SEPCOIII Kibo signs SDA with China's SEPCOIII Kibo signs SDA with China's SEPCOIII

Kibo's Mbeya project is one of three current projects where SEPCOIII has the sole right to bid on EPC contracts

Staff reporter

The investment includes an initial direct equity of 10-15% of Kibo's issued capital share capital, with the option to make a similar second direct equity investment within 18 months.

Under the SDA, the initial investment will give SEPCOIII the right to become the sole bidder for any of Kibo's current or upcoming energy projects' engineering, procurement and construction (EPC) contracts.

However, bids must be deemed competitive according to an international benchmark independently determined by consulting engineers and SEPCOIII's right to sole bidder will lapse if parties don't reach a bid price and terms agreement within 90 days of submission.

Kibo is simultaneously developing the Mbeya coal to power project in Tanzania, the Mabesekwa coal independent power project in Botswana and the Benga independent power project in Mozambique.

The company said the investment endorsed its strategy to become a leading regional energy player in Africa, with CEO Louis Coetzee saying the agreement, after months of negotiations, provided Kibo with cash stability in the shirt- to medium- term and strengthened its network of key partnerships and institutional investors.

"Crucially, SEPCOIII'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," he said.

The market reacted well to the agreement, with KIbo's shares climbing 6.18% Tuesday to 4.51p (US5.95c).