Aim- and AltX-listed renewable-energy-focused development company Kibo Energy will potentially introduce an additional revenue stream to its 2.7 MW plastic-to-syngas power plant, which resides within its 65%-owned Sustineri Energy subsidiary.

This potential new revenue stream involves the production of synthetic oil from non-recyclable plastic waste, in addition to the production of electricity from syngas, which promises significant added benefits to the project.

It is expected that the addition of synthetic oil production could significantly increase the project’s profitability and provide Kibo with the opportunity to potentially generate revenue much earlier than initially projected. The company said on January 17 that it would also contribute materially to derisking the project and make it significantly more attractive to a wider spectrum of interested funders, thereby reducing the funding risk.

“The potential introduction of this significant development to our first South African waste-to-energy project has great potential for investors, the company and South Africa’s highly challenging energy sector,” Kibo CEO and acting chairperson Louis Coetzee said.

Kibo said it has already determined the technical and commercial viability of synthetic oil production through the current project design. It is now conducting a comprehensive integration study to determine the full technical, operational and financial impact to the project in terms of construction, commissioning and, most importantly, ultimate profitability and investment returns.

As a result of the decision to potentially introduce the production of synthetic oil to the project, the development thereof can then be executed in distinct phases, with an expected positive impact on the project’s funding requirements and its ability to secure said financing.

Phase 1 will include the construction of the plant to produce synthetic oil and will be followed by Phase 2, when the electricity from syngas production facility will be added. Phase 1 involves the installation of a materials preparation system, a pyrolysis chamber and condensers that will produce synthetic oil products.

During the second phase, the pyrolysis chamber temperature will be elevated to produce syngas that will be fed to newly installed gas engines for electricity generation. The principal design of Phases 1 and 2 will remain the same, with only a few equipment additions during Phase 2.

The final decision to proceed with the implementation of Phase 1 remains subject to the outcomes of the integration study.

Kibo will now complete the integration study and continue to secure financial close, with the construction phase to begin shortly thereafter.

“The phased approach to the project will allow Kibo Energy the opportunity to stay on track with the project rollout but with potentially significant value added to an already strong business case. It will also ensure that the company remains on course to actively pursue the successful execution of its declared strategy of advancing clean [and] renewable energy solutions,” Coetzee said.