The Board of Shumba Energy Limited announced that is has signed a binding Heads of Agreement with Kibo Energy PLC and with various subsidiaries of Kibo and Shumba to reposition and strategically leverage the Mabesekwa Project Botswana. Under the terms of the Agreement, the Parties will jointly manage and oversee the development of a bespoke 300MW power station with Shumba maintaining a controlling stake. The KP1 Power Plant will power a Petrochemical plant which will provide first Botswana, with up to 80% of its domestic fuel requirements and later the Southern African market at large.

Currently all of Botswana's fuel is imported. Accordingly, a power purchase agreement will be entered to provide 100% of the electricity required to fuel the plant over its life. The Parties will jointly manage the development of the KP1 power station.

As announced previously, Shumba recently concluded a joint venture partnership which has led to it holding 80% of the equity in Coal Petroleum Ltd. ("CoPet"). CoPet is a company that is focused on the development of a commercial scale liquid fuels production facility in Botswana. The technical aspects of a Bankable Feasibility Study of the liquid fuels plant, undertaken in conjunction with two large Chinese conglomerates, which will be built at Mabesekwa, is nearing completion.

The plant is expected to produce 20 000 barrels per day of diesel and 5000 barrels of gasoline per day when it is complete, as well as having potential for additional chemical production circuits. Additionally, the parties have agreed to amalgamate their coal assets to create a 760Mt resource to fuel the power plant and supply the new PCP. Shumba already has a binding Coal Supply Agreement to guarantee supply of all the feedstock that would be required for the life of the PCP, which will now incorporate Kibo's coal resources.