Kibo Energy PLC (LON:KIBO) is confident that TANESCO’s decision to cancel the tender process is more of a postponement and will have little effect on the company’s Mbeya Coal to Power project in Tanzania.
AIM-quoted Kibo owns a thermal coal deposit near Mbeya in southern Tanzania, where it is developing MCPP – a 250-350 megawatt mouth-of-mine thermal power station.
State-owned TANESCO launched a tender process last month which would have seen it buy electricity produced at MCPP had Kibo’s bid proved successful.
But TANESCO said today that it was cancelling the tender process, citing “unavoidable circumstances”.
Kibo bosses have spoken with TANESCO though and it is their understanding that the tender is “definitely still going ahead” and not affected by the announcement.
The company added that a couple of procedural tweaks to the tender process are required but that these amendments aren’t expected to cause any delays.
“Today's TANESCO announcement is unfortunate but not out of the ordinary for a complicated tender process of this nature,” said chief executive Louis Coetzee.
“We are looking forward to resuming the tender process shortly.”
He added: “In a rather curious manner the company welcomes the brief respite in respect of the MCPP process allowing us to bolster our efforts in Botswana and Mozambique where multiple work streams are constantly gaining in momentum to see the ongoing technical studies and PPA negotiations for the MCIPP and BPPP completing ahead of schedule.
“Significant progress has also been made over the past weeks with regard to power off take agreements for the respective projects during meetings with potential power off takers. We are also very pleased with progress on advancing the reserve power projects under Mast Energy Developments over the past two weeks.”
Kibo shares were down 12% to 1.9p in early afternoon trading.