- Principal amount of 5-year tenor facility is P76.5m
- Proposed facility to be raised from local investment firm
- Tlou has a 10MW Power Purchase Agreement with BPC
GAZETTE REPORTER
Tlou Energy has announced the signing of an indicative term sheet for a proposed mezzanine debt facility with a local investment management firm.
The principal amount for the proposed facility is P76.5 million (approximately A$8.5 million or £4.4 million).
The facility has a five-year tenor with a bullet principal repayment at the end of the term and a nominal annual coupon rate of 15 percent, compounded monthly.
Lesedi substation
Additionally, Tlou has the option to capitalise interest payments for the first 24 months.
The funds will be directed towards development of Tlou’s Lesedi power project. This includes acquisition of generators and operations equipment and completion of the Lesedi substation and associated infrastructure.
The company emphasised that the indicative term sheet does not encompass all terms and conditions of the proposed facility.
Due diligence
It added that the final agreement will be subject to legal counsel review, satisfactory due diligence, final documentation, investment committee approval, and fulfilment of certain pre-conditions.
In a recent statement, Tlou noted: “The process will begin immediately. The term sheet is non-binding, except for exclusivity, confidentiality, fees, costs and expenses, applicable law, and jurisdiction clauses.”
The Botswana-based power generation company is actively developing energy solutions in Sub-Saharan Africa through gas-fired power and ancillary projects.
Strategic location
The company is listed on the ASX (Australia), AIM (UK), and the BSE (Botswana). Its most advanced project, the Lesedi Gas-to-Power Project (Lesedi), is 100 percent owned by Tlou.
The company boasts competitive advantages such as cost-effective gas drilling, operational experience, and Lesedi’s strategic location relative to energy customers.
According to the company, major government approvals have been achieved for the project.
Incremental
Electricity generated on-site at Lesedi will be sold into Botswana’s national power grid under a 10MW Power Purchase Agreement (PPA) with the Botswana Power Corporation (BPC).
“The project is planned to grow incrementally to satisfy the 10MW PPA and then expand further,” Tlou said in the statement.
Initial generation will utilise gas produced from Lesedi 4 and Lesedi 6, with additional generation units to be added as more gas is produced.