Kibo Energy plc, a UK renewable energy company listed in London and Johannesburg, has acquired the 100MW Victoria Falls Solar Park project for US$13 million.
The first 25MW of the project is fully funded and under construction, with the first 5MW expected to be in production by end of April 2022. The 25MW is to be connected to the grid by year-end.
Kibo is buying the project through a share purchase agreement with Brownhill, the company that was developing the project via its subsidiary Power Ventures.
Kibo, which has previously had interests in coal mining, has been moving away from fossils to invest in renewables, and CEO Louis Coetzee, says the Victoria Falls deal ties in with its strategy.
“We are pleased to have been in a favourable position to participate in this transaction, which is timely, following the company’s strategy to disinvest from fossil fuels and focus on renewable and clean energy projects,” Coetzee says.
“The successful completion of this Transaction will scale up Kibo’s footprint in Africa, with the potential addition of renewable energy projects in excess of 100MW with the first 5MW going into production at the end of April and the first 25MW fully funded for construction and commissioning.”
It is connected to the Hwange-Victoria Falls national transmission line, less than a kilometre from the solar facility.
On completion, the project will generate 100 MW of solar power, and is projected to deliver free cashflow (EBIT) of around US$107 million, according to the company.
In 2020, government invited bids for the installation of 500MW of solar power plants, hoping a shift to renewable energy will help ease crippling power cuts. But investment into Zimbabwean solar has been slowed by investor doubts that they will be paid in US dollars for supplying power. Government is reluctant to issue IPPs the guarantees they demand.
The Victoria Falls project, however, has a 10-year power purchase agreement denominated in USD, and it will supply mining and industrial customers.
Kibo, has invested in coal assets before, including a 300MW coal-to-power project in Tanzania and Mabesekwa in Botswana. But it is shifting to renewables, with one of its most recent new projects being a 2.7MW plastic-to-syngas power plant in South Africa.
The company’s acquisition strategy has been to target projects that are near production; its renewable energy assets all have a time horizon of less than 18 months to first production.