Shares of Kibo Energy PLC (LON: KIBO) surged 15% as investors caught on to its strategic shift towards renewable energy to capitalise on South Africa’s recent rule change favouring private electricity producers.
The company recently announced that it was disposing of its South African coal assets favouring renewable energy assets after the government allowed private power companies to produce up to 100 MW of electricity without applying for a license.
Kibo wants to develop a portfolio of waste-to-energy projects in South Africa and is looking for ways to dispose of or repurpose its coal plants to accept other energy sources to generate renewable electricity.
The company’s shift towards renewable energy kicked into high gear in April when it started doing the due diligence on several private offtake renewable energy projects in the UK with the ultimate goal of acquiring some of them.
Kibo Energy has partnered with Industrial Green Solutions Pty Ltd, a South African renewable energy specialist, to develop its first 8MW facility waste-to-energy power generation plant and plans to expand the portfolio to seven projects.
The company’s initial target is to generate up to 50MW from its renewable energy power plants, which is way below the 100MW upper limit set by the government.
Kibo intends to capitalise on the significant demand for electricity within South Africa. However, the country continues to suffer from massive power outages that affect the smooth operation of businesses, impacting the company’s economy negatively.
Louis Coetzee, Kibo Energy’s CEO, said: “Shifting the company's primary focus to renewable energy projects will provide the company with the opportunity to develop projects with much smaller [capital expenditure] requirements and with a significantly shorter route to revenue generation that is associated with much less risk and access to a far wider and cheaper array of non-dilutive funding options.”
Kibo Energy share price.
Kibo Energy shares surged 25% to trade at 0.25p, rising from Tuesday’s closing price of 0.20p.
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