Binding Term Sheet for 200MW to Baobab Resources

Kibo Energy PLC (Incorporated in Ireland)

(Registration Number: 451931)

(External registration number: 2011/007371/10)

Share code on the JSE Limited: KBO

Share code on the AIM: KIBO

ISIN: IE00B97C0C31

("Kibo" or "the Company")

Dated: 18 May 2020

Kibo Energy PLC ('Kibo' or the 'Company')

Binding Term Sheet to Supply 200MW Energy to Baobab Resources in Mozambique

Kibo Energy PLC ('Kibo' or the 'Company'), the multi-asset, Africa focused, energy company is pleased to announce that it has signed a binding term sheet (the 'Agreement') with Baobab Resources Ltd ('Baobab') to supply c. 200MW energy to its Tete Steel and Vanadium Project ('TSV Project') in Mozambique.

Highlights

·    Baobab to exclusively deal and negotiate with Kibo regarding entering into a Power Purchase Agreement ('PPA') to supply c. 200MW energy to its TSV Project in Mozambique

·    Located approximately 36km away from Kibo's Benga Power Plant Project ('Benga'), the TSV Project is recognised as a key development project in Mozambique

Louis Coetzee, CEO of Kibo, said: "We are delighted to have secured this strategically important agreement with Baobab. 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 c. 200MW energy requirements, subject to reaching final agreement on an appropriate PPA.  This PPA will be one of a number of supply agreements we are targeting for Benga, in line with our commitment to creating reliable, sustainable and affordable electricity in Mozambique and we look forward to providing further updates in due course as these agreements progress. It is envisaged that the c. 200MW requirement of the TSV Project will be developed as part of the existing Benga Power Project, and talks are currently underway with our JV-partners in Benga, to determine whether the latest addition to the Benga portfolio will have any impact on the economic interest of each JV partner, given Kibo's added efforts in increasing the utilisation of Benga.

We look forward to updating the market with further developments in due course".

Details

Kibo remains focused on developing the Benga Power Plant Project in Mozambique with its joint venture partner, Termoeléctrica de Benga S.A, which will now comprise a thermal power plant with min capacity of 350MW, as well as planned renewable energy projects. To this end, it has signed a binding term sheet with Baobab to supply the complete c. 200MW energy requirements to its TSV Project.

Located approximately 36km away from Benga, TSV is being developed to produce half a million tonnes of construction steel per annum and is construction-ready with all licences, concessions, and agreements in place.  This is recognised as a key development project in Mozambique and is set to be the anchor industry for the Revuboe Industrial Free Zone ('RIFZ'), Mozambique's newest and largest industrial zone.

Under the terms of the Agreement, which is valid until 30 September 2020 (or such extended date as may be agreed upon in writing between the parties), Baobab agrees to exclusively deal and negotiate with Kibo with regard to entering into the proposed PPA.  Kibo can continue to seek and secure other PPAs, including the agreement it is currently pursuing with Mozambican state-owned electric utility Electricidade de Mocambique ('EDM') (see RNS dated 11.05.20 for further information) providing that such agreements do not negatively affect the uninterrupted supply of 100% of the energy needs and requirements of the TSV Project.

For more information on Baobab Resources LTD and the TSV Project please follow: http://www.baobabresources.com/ 

**ENDS**

For further information please visit www.kibo.energy or contact:

Notes

Kibo Energy PLC is a multi-asset, Africa focused, energy company positioned to address the acute power deficit, which is one of the primary impediments to economic development in Sub-Saharan Africa. To this end, it is the Company's objective to become a leading independent power producer in the region.

Kibo is simultaneously developing three similar coal-fuelled power projects: the Mbeya Coal to Power Project ('MCPP') in Tanzania; the Mabesekwa Coal Independent Power Project ('MCIPP') in Botswana; and the Benga Independent Power Project ('BIPP') in Mozambique.  By developing these projects in parallel, the Company intends to leverage considerable economies of scale and timing in respect of strategic partnerships, procurement, equipment, human capital, execution capability / capacity and project finance.

Additionally, the Company has a 60% interest in MAST Energy Developments Limited ('MED'), a private UK registered company targeting the development and operation of flexible power plants to service the UK Reserve Power generation market.

Johannesburg

18 May 2020

Corporate and Designated Adviser

River Group