JSE-listed Kibo energy on Tuesday announced the official commencement of the second overhaul of its power-generating sets for its Pyebridge site under the company’s United Kingdom-based Mast Energy division.
The company has also applied for increased capacity under the Pyebridge project in the UK.
“Mast Energy Developments is pleased to announce the official commencement of the second genset overhaul, and application for an increased capacity market contract at its Pyebridge flexible power-generation asset,” the company said on Tuesday.
The first refurbished gensets under Pyebridge achieved £57 000 (R1.3 million) in monthly revenue, paving the way for the second overhaul of the second power-generating set.
Pyebridge had also signed up an Engineering Works contract for the second genset’s overhaul which will enable the UK site to apply for an enhanced capacity contract.
“We are pleased to have officially initiated the second genset’s overhaul, following the successful completion of the first genset’s overhaul and its positive maiden performance results,” Pieter Krügel, CEO for Mast Energy said on Tuesday.
Mast Energy was expecting that the completion of the second Pyebridge genset’s overhaul will not only see additional enhanced revenue-generation via the Pyebridge site’s PPA with Statkraft, but also enable the application for an enhanced-capacity contract which will further boost income.
“Mast Enery’s funding partnership with RiverFort has been instrumental in enabling and fast-tracking the work programme at Pyebridge, which has already resulted in increased revenue generation sooner than expected. RiverFort’s ongoing support to MED is invaluable and much appreciated,” added Krugel.
The company was now “looking forward to updating the market with further progress across the board” in the next few weeks.
Pyebridge had now signed an Engineering Works contract with Cooper Ostlund, the Pyebridge site’s contractor, regarding the full long-block overhaul of the second genset as well as further essential improvements to the site.
In addition to the expected enhanced revenue generation via the Pyebridge site’s purchasing power agreement, it is expected that Pyebridge will apply for its next T-1 CM contract in the upcoming pre-qualification assessment window, and subsequent bid auction for the 2025/2026 delivery year at enhanced-generation capacity.
This will result in increased contractual gross profit margin income received from that contract.
“Once the work on the second genset has been completed, Pyebridge will have 2x2.7MW completely refurbished gensets operating and generating at optimum capacity and performance, which should have a direct positive impact regarding the site’s PPA revenue generation,” the company explained.
Mast Energy plans on overhauling the then remaining third genset in in order to maximise full reliability, efficiency and revenue-generating ability of the Pyebridge site in the most cost-efficient manner.
Pyebridge will also continue to receive its current Capacity Market contract income from the UK government. Costs for the second genset’s overhaul will be funded under the Project Finance agreement with RiverFort that enlists Pyebridge as the borrower.
As such, the board of Mast Energy had agreed with RiverFort on a third advance against the project finance agreement amounting to a gross total of £1.1 million. Proceeds from the third advance will solely be used for works at Pyebridge under the second genset overhaul.
“Th third advance accelerates the overhaul of the second genset, and once the work is completed, it will result in additional revenue being generated,” the company said.
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