The assets to be acquired under the proposed deal include 36 development projects. Credit: bombermoon / Shutterstock.

Kibo Energy has signed a binding term sheet with Swiss company ESGTI to acquire a diverse portfolio of renewable energy projects.

The strategic move, known as a reverse takeover, will see Kibo Energy expanding its reach across Europe and Africa, targeting a generation capacity of 20GW within six years.

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The proposed acquisition encompasses 36 development projects in 15 countries, ranging from early-stage to under-construction assets.

The expansion aligns with Kibo’s decision to divest its unprofitable coal assets and its waste-to-energy and biofuel projects in Sub-Saharan Africa, managed by its subsidiary Kibo Mining (Cyprus) Limited (KMCL).

Valued at €400m ($445m), the deal with ESGTI is being facilitated by Aria Capital Management.

The term sheet is contingent upon standard closing conditions, including due diligence, board and shareholder approvals, and regulatory clearances.

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The reverse takeover is significant, as the value of the acquisition exceeds Kibo’s current market capitalisation.

The reverse takeover will also involve a share capital consolidation and a €30m share placing, which ESGTI will arrange.

In terms of asset disposal, Kibo has agreed to sell KMCL to Aria.

This sale includes a term sheet and an expected conditional sale and purchase agreement within five business days.

Aria will take on the historic payroll liabilities associated with the assets as part of the transaction consideration.

Kibo’s 19.52% stake in Mast Energy Developments (MED), a UK-based flexible power market player, currently held through KMCL, will not be part of the KMCL sale.

In October 2023, Kibo Energy announced that it would divest all its coal assets by entering into a definitive share sale agreement with Shumba Energy.