Kibo Energy Plc has announced that it has entered into a 10-year take-or-pay conditional Power Purchase Agreement (PPA) to generate baseload electricity from a 2.7 MW plastic-to-syngas power plant. Construction of the project is scheduled to commence during Q4 of 2022 with project commissioning 11 to 14 months thereafter.
According to Kibo Energy, the plant will be constructed, commissioned and operated for an undisclosed client which operates an Industrial Business Park in the Gauteng Province of South Africa. The Project is the first project under Sustineri Energy, a joint venture in which Kibo Energy PLC holds 65% and the balance of 35% is held by Industrial Green Energy Solutions PTY LTD (IGES).
“Following the Company’s disinvestment from coal, we are excited to have signed our first waste to energy PPA that aligns to our strategy on advancing clean energy in the African market. The Project is a first in a pipeline of projects under the Company’s waste-to-energy portfolio, which we are proud to have worked on together with our partners, IGES,” said Louis Coetzee, Chief Executive Officer of Kibo.
Project to reduce plastic pollution
The Project will provide the client with cleaner electricity, by making use of a high temperature pyrolysis process, where selected non-recyclable plastics will undergo thermal degradation to produce high quality syngas, which will in turn feed gas engines to generate both electricity and heat energy. Additionally, there is potential to sell the heat energy generated as a byproduct from the gas engines directly to customers inside the industrial park.
Kibo says the project will require a capital expenditure (CAPEX) of ZAR 180 million with Financial Close expected during Q3 2022. Based on the optimised financial model, an EBITDA of ZAR 388 million over the life of the project is expected, for an installed capacity of 2.7 MW, of which an amount of ZAR 252 million is attributable to the Company. There is potential to expand the project to 8 MW installed capacity in the future. An IRR between 11% – 14% per annum is projected on the initial installed capacity of 2.7 MW.
The waste to energy plant will help reduce plastic pollution as it uses a selected and specific high calorific plastic as fuel feedstock, which can under prevailing legislation no longer be dumped at landfill sites.
Leading EPC and Engineering company, Lesedi, has been appointed as the Engineering, Procurement and Construction (EPC) and Operations and Management (O&M) contractors of the project.
