KIBO Energy PLC (Kibo), the international energy development company with three Power Plant projects progressing
simultaneously in Africa, is now very well-positioned in its markets.
Most of the ‘heavy lifting’ in terms of permit applications and negotiations with key partners has been done, and with the urgent need for greater electricity supply across the whole African continent, Kibo is strategically very well positioned.
We value Kibo using DCF methodology and find a value of 30p per share, but given there are still many uncertainties, we discount this by 50% to give us our near-term target price of 15p. We thus initiate coverage of KIBO Energy
Key Near-Term Dates / Periods
In the near term, we have the 30 November 2018 expected decision date with regard to SEPCO III’s equity investment in Kibo. We assume funds are received during December 2018 as highlighted in the
Actual & Possible Capital events table on page 17. Importantly, this is a First Equity assumption, and this event may not occur within our assumed timeline. Further, this is a corporate milestone
and not a project milestone, so it is not shown in the table above.
In December 2018, we expect news on the Tanzania Special Mining Licence Award (SML) and news on the Tender Qualification from TANESCO, as shown in the table above.
Then during Q1-19, we expect agreement on the Mozambique Power Purchase Agreement (PPA), as shown in the table above.
Strong Economic Growth Outlook
According to the African Energy Outlook 2040 study, which was developed as part of the Programme for Infrastructure Development (PIDA), the outlook for GDP growth across Africa is some 7% annually on average over the period 2015 – 2030, and this is despite the implications of power shortages.
Full PDF Document Link HERE
Company Website kibo.energy
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