REG - Solgenics Limited - Offtake Discussion Update

SolgenicsAnnouncement

23/03/2023 07:15

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RNS Number : 9308T  Solgenics Limited  23 March 2023

 

News Release

 

Offtake Discussion Update

 

23 March 2023: Solgenics Limited (the "Company") is pleased to announce an
update on offtake discussions for their flagship 300MW solar PV plus Battery
Energy Storage System ("BESS") renewable energy project in Tete Province,
Mozambique (the "Tete Solar Project" or the "Project").

Highlights

·      Multiple NDAs signed with potential Project power offtakers (the
"Offtakers") for first phase 100MW plant

 

·      Updated Project development programme to deliver a Bankable
Feasibility Study ("BFS") has been finalised based on Offtaker discussions and
requirements following presentation of the Project Feasibility Study ("FS")

 

·      BFS includes the completion of key Project work streams,
including:

o  Market sounding on power tariff key assumptions (capex, opex and financing
costs)

o  Offtaker power tariff approval

o  Offtaker signature of Power Purchase Agreement ("PPA")

o  Completion and Government approval of Project Environmental and Social
Impact Assessments Studies ("ESIA")

 

·      BFS has a budgeted cost of up to US$1.5m which will need to be
secured before any work streams can be launched

 

·      BFS funding strategy launched with a focus on non dilutive
structure

o  Targeting Project level development loans

o  Potential funders include Development Funding Institutions ("DFI's") and
Independent Power Producers ("IPP's")

o  Multiple NDAs signed for potential funding

o  Targeting selection of preferred funding partner in Q2 2023

 

·      BFS is expected to take 9 to 12 months to complete once funding
is in place

 

·      Latest investor presentation for the Tete Solar Project is
available on the Company's website www.solgenics.com
(http://www.solgenics.com)

 

Solgenics Chief Executive Officer, Hanno Pengilly said: "Over the last 9
months, the company has made significant progress in demonstrating a
technically and economically attractive project to both potential offtakers
and development funders.

Since completion of the FS in February 2023, discussions with Offtakers have
been positive with an emphasis on the Company upgrading the results of the FS
to BFS so offtake (PPA) negotiations can be finalised. The BFS is expected to
increase confidence levels around the power tariff inputs assumptions, which
is important to both project financiers and Offtakers, particularly given that
the Project is targeting a long term 25 year PPA.

The BFS scope and budget have been updated based on Offtaker engagement and is
expected to take 9 to 12 months once funding has been secured. To complete the
BFS, a development budget of up to US$1.5m has been created and includes
latest quotes from 3rd party consultants and advisors.

The BFS will have two critical path works streams run in parallel, being the
execution of a PPA with a preferred Offtaker and the completion and approval
of the ESIA. The PPA process is expected to be delivered over three phases,
the first being finalisation of the Project tariff, followed by approval of
the Offtaker tariff and finally, signing of the PPA.

Solgenics has launched a development funding process for the BFS and has
received multiple expressions of interest from potential funders. Discussions
have been entered into under NDA to identify a preferred funding solution with
target selection in Q2 2023. The Board's aim is to secure project level
funding, removing dilution risk for existing shareholders while progressing
the various workstreams required which will significantly de-risk the Project.

The Company has entered an exciting phase of development with a material
opportunity to unlock value over a 9 to 12 month period, reflected in the
positive engagement with potential Offtakers and Funders.

We look forward to providing further updates in the near future."

 

Enquiries

For further information please visit www.solgenics.com
(http://www.solgenics.com) or contact:

 Solgenics:                 Hanno Pengilly                                 +27 (0) 71 362 3566
                            Scott Mathieson, Edward Thomas, Kane Collings  +44 (0) 20 3100 2000

 Liberum Capital Limited:

NOMAD & Joint Broker

 Novum Securities Limited   Colin Rowbury                                  +44 (0) 20 7399 9427

 Joint Broker
                            Elizabeth Johnson                              +44 (0) 777 56 55 927

 Pimlico Advisory Ltd

 Investor Relations

 

About Solgenics

Solgenics is an African renewable energy development company focused on the
development of a 300MW solar PV plus BESS renewable energy in the Tete
Province in northern Mozambique (the "Tete Solar Project").

It is the intention that the Tete Solar Project will connect to the Mozambique
grid with target power offtakers in Mozambique and the Southern African Power
Pool ("SAPP").

The Tete Solar Project takes full advantage of Mozambique's leading
sustainable energy resources and is fully aligned with Government's objective
to become a champion for energy transition impacting all Southern Africa.

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