Tlou agrees to $5mn financing for Lesedi project in Botswana
Australian coalbed methane developer Tlou Energy has signed a 50mn Botswana pula ($5mn) convertible loan note with Botswana Public Officers Pension Fund (BPOPF) and has also agreed to terms for an equity investment by BPOPF, it said on November 30.
The funds will to be used to finance the construction of transmission line infrastructure to connect the Lesedi project to the Botswana Power Corporation power grid and to fund the installation of generation assets and ancillary costs to facilitate power generation and sale of electricity.
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In October, Tlou signed a power purchase deal with Botswana Power for electricity supplies from its Lesedi project. The agreement covers the project's first 10-MW phase. The company is also looking to generate solar power and produce green hydrogen in Botswana.
The note has a fixed interest rate of 7.75%/year payable every six months. Interest may be capitalised for the first 18 months. The note can be converted to ordinary shares on exercise of the conversion option by BPOPF at a 10% discount to the weighted average traded price of the company's shares on the highest average volume exchange over the 90 trading days prior to the maturity date, Tlou said.
In addition to the note, Tlou and BPOPF have agreed on preliminary terms for a further $5mn equity investment post July 2022, which is conditional to legal agreements in relation to this process being prepared and finalised.