Kibo Energy says it has signed a binding term sheet to supply 200 MW of energy to Baobab Resources’ Tete Steel and Vanadium (TSV) project in Mozambique.
The binding term sheet allows Baobab to exclusively deal and negotiate with Kibo regarding entering into a power purchase agreement (PPA) to supply the energy from its in-development Benga power plant, around 36 km away.
Louis Coetzee, CEO of Kibo, said: “The TSV project represents one of Mozambique’s key development projects that could contribute significantly to the growth of the country. We are therefore delighted that our Benga project will be supporting this growth by providing 100% of TSV project’s circa-200 MW energy requirements, subject to reaching final agreement on an appropriate PPA.”
Coetzee said this PPA was one of several supply agreements the company is targeting for Benga, in line with “our commitment to creating reliable, sustainable and affordable electricity in Mozambique”.
Kibo remains focused on developing Benga with its joint venture partner, Termoeléctrica de Benga SA, which will now comprise a thermal power plant with minimum capacity of 350 MW, as well as planned renewable energy projects.
TSV is being developed to produce 0.5 Mt/y of construction steel and is construction-ready with all licences, concessions, and agreements in place, according to Kibo. “This is recognised as a key development project in Mozambique and is set to be the anchor industry for the Revuboe Industrial Free Zone, Mozambique’s newest and largest industrial zone,” it said.