Updated MOU for Mbeya coal to power project

Kibo Mining has announced that the existing Memorandum of Understanding (MOU) for the development and implementation of the Mbeya Coal to Power Project (MCPP), will be updated.

Following consultations between Kibo Mining, the Tanzanian Ministry of Energy and the Tanzania Electric Supply Company (TANESCO), it was agreed to update the existing MOU regarding a Power Purchase Agreement (PPA) for the development and implementation of the MCPP, to provide for a more streamlined process with materially shorter time lines for PPA finalization.

Image credit: Kibo Mining

Kibo has been in very constructive engagement with the Tanzanian Government and TANESCO over the past two months (see recent RNS’) to conclude the updated MOU that will govern the process to agree and implement the PPA. All stakeholders have recognised that the development and implementation of a PPA for the MCPP must be expedited quickly given the significant delays over the past year, as well as the strategic importance of the MCPP.

As a result, all parties have agreed to replace the original MOU and update it to streamline the process for conclusion of the PPA. “This agreement underlines the recognition by all stakeholders that the MCPP project is of national importance and that there was a need to define a faster process to reach formal agreement on a PPA via the MOU,” says Louis Coetzee, Kibo Mining CEO.

The updated MOU has subsequently been approved and confirmed in writing by the board of TANESCO, and authorised for immediate implementation. Accordingly, the approved updated MOU has now been submitted to all other concerned parties, such as the Ministry of Energy and the Attorney General, for endorsement before final signing by Kibo and TANESCO. This remaining administrative process is already underway, and the Kibo board believes it will be completed imminently.

“Both the Ministry of Energy and TANESCO recognise the importance of reaching a final PPA for the MCPP as soon as practically possible and that the delays in the finalisation of the MOU and subsequent PPA had to be addressed by a reassessment of the conditions precedent to ensure that the PPA is expedited and crystalised for the benefit of all stakeholders,” adds Coetzee.

“In the confirmation letter received, TANESCO emphasised the strategic importance of the MCPP, as well as their support and full commitment to ensure that the expedited timelines in the updated MOU, along which the PPA is to be agreed and finalised, are indeed met. We continue to work with all parties, including SEPCO III and GE to execute the milestones associated with MCPP and I would like to thank all our shareholders and stakeholders for their support and look forward to updating them on further developments as we progress and build value for them and Tanzania,” concludes Coetzee.

Kibo anticipates providing additional information on the material details of the updated MOU and the expedited time lines once the updated MOU has been fully executed.



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