Tlou Energy, a power generation company developing clean energy solutions for Botswana and the sub-Saharan region, says it has signed a Convertible Note Agreement to the value of P50 million with the Botswana Public Officers Pension Fund (BPOPF) and agreed to terms for an equity investment by the BPOPF.
Tlou Energy says the funds are planned to be used to finance construction of transmission line infrastructure to connect the Lesedi Project to the Botswana Power Corporation (BPC) power grid and to fund installation of generation assets and ancillary costs to facilitate power generation and sale of electricity.
The principal terms of the Convertible Note Agreement carry a maturity term of five years at an interest rate of 7.75 percent per annum payable every six months and is convertible to ordinary shares on exercise of the conversion option by BPOPF at a 10 percent discount to the weighted average traded price of the company’s shares on the highest average volume exchange of the BSE/ASX/AIM over the 90 trading days prior to the maturity date.
“Upon conversion of the Note into fully paid ordinary shares, the shares will rank pari passu with the company’s existing shares. The company shall obtain all regulatory and shareholder approvals as applicable which shall be conditions precedent to the coming into force and effect of the Note and any obligations placed upon BPOPF to subscribe for the Note,” the company said in a statement published on the Botswana Stock Exchange .
In addition to the Note, Tlou Energy and BPOPF have agreed preliminary terms for a further P50million (USD 5million) equity investment post 1 July 2022 which is conditional to legal agreements in relation to this process being prepared and finalised.
Tlou Energy has signed a 10MW Power Purchase Agreement (PPA) with the Botswana Power Corporation (BPC) under which BPC will purchase up to 10MW of power generated at the company’s Lesedi power project.
The company identifies, explores, evaluates, and develops coal bed methane (CBM) resources in southern Africa. It holds one mining licence and nine prospecting licences covering an area of approximately 8,300 square kilometers in the Karoo Basin, Botswana while Botswana Public Officers Pensions Fund is the biggest pension fund in Botswana and Tlou’s largest shareholder. The Fund was registered in 2001 and has experienced phenomenal growth since its inception.