Tlou Energy, an exploration company focused on delivering clean energy, continues to raise funds to build infrastructure that will connect their most advanced power project to the existing electricity grid.
In the latest capital raising exercise, the company listed on the Australian Securities Exchange, London’s AIM market and the Botswana Stock Exchange, this week said it received firm commitments to raise A$3 million (P26.5 million) pursuant to a placing of 87.8 million new ordinary shares at a price of 3.5 Australian cents per share to an entity controlled by Dr. Ian Campbell, a high net worth investor based in Sydney and a major shareholder in Tlou. It follows a similar placing in November in which Campbell funded the company for A$2 million (P17.3 million)
Campbell has now increased to 25.79 percent interest in the company as a result of the latest equity issue. The wealthy investor has indicated to the company that he intends to remain a long term strategic investor and has expressed a willingness to potentially provide further financial support to the company.
“I am also delighted that Dr. Campbell has indicated to the company that he will work with us to secure additional funding aimed at fast-tracking development of the 10MW power project as early as possible,” the company said in a statement on Friday.
The proceeds are earmarked for use in the development of Tlou’s Lesedi Power Project in Botswana. The company is currently developing projects using gas, and plans to combine this with solar power to provide a cleaner base load power source. The company says its Lesedi power project provides investors with access to a compelling opportunity to displace expensive, carbon intensive diesel and imported coal‐fired electricity with a cleaner and more environmentally friendly alternative.
Tlou added that further funding could fast track project development including the anticipated high impact drilling campaign scheduled for 2023, and, that work would aim to yield further gas for electricity generation under the Power Purchase Agreement with Botswana Power Corporation.
Last year, Tlou disclosed that it intends to raise more than P300 million for Lesedi Project, to be developed in two phases. Phase one involves transmission line construction, substations, grid connection, electricity generators and potentially the drilling of additional gas wells. The approximately 100 Km transmission line will run from the Lesedi project to Serowe where it will connect to the existing power grid.
Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is approximately $10 million (P107 million), while phase two funding is for the expansion of electricity generation up to 10MW. This will involve drilling gas wells and the purchase of additional electricity generation assets. The funding required for Phase Two is $20 million (P215 million). Upon successful completion of Phase one and two, Tlou Energy plans to expand the project beyond 10MW.
During the first quarter of 2021, the company managed to raise gross proceeds of £2.625 million (P38 million) after it placed 75 million new shares at an issue price of 3.5 pence per share. In November 2021, Tlou signed a $5 million convertible loan with Botswana Public Officers Pension Fund (BPOPF) and also agreed terms for an equity investment by the nation’s biggest pension fund. The note has a maturity of five years and pays an annual interest rate of 7.75 percent.
This was on the back of another capital raising exercise in 2019 in which the company the company sold additional 41.1 million shares to raise P30.1 million. One of the biggest buyer of the shares was BPOPF, buying about 68 percent of the shares that were on offer. BPOPF currently has a 7.87 percent shareholding in the company.
