Shumba Energy reports setback

Shumba Energy reported that it experienced financial hardships last year due to the impact of Covid- 19 and commitment of investors into other projects. The company is currently placed under suspension from trading by Botswana Stock Exchange due to delay in publishing financial results for the year ended June 2021. Shumba Energy group is anticipating a loss of up to USD 1, 5 million compared to a profit of USD 2.7 million recorded in the previous year. The decline in financial performance is attributed to the once- off item, gain of bargain purchase of USD 4.9 million. “The expected loss for the 12 months ended 30 June 2022 will represent a decline of approximately USD3.7 million to USD4.2 million, a total decline of approximately 137 percent to 155 percent.” Shumba Energy Board of directors revealed that the requirement for development of hydrocarbon assets for base load power generation within the growing energy crisis is proving to be positive for the company. “This has justified our belief and the decision taken by the board some five years ago that we should maintain our strong hydrocarbon asset portfolio and make it development ready for the inevitable change that would come.” During the year the company highlighted that despite the expected loss, the company has navigated successfully its most challenging period since its incorporation and listing on the BSE. “The impacts of the Covid- 19 pandemic causing contractual force- majeure by both commercial partners that provided revenues and margin sufficient to cover operating costs, and by investors that have committed to various project developments within our portfolio caused significant financial hardship.” The company stated that it has emerged successfully with a strong foundation supported by new investment within the renewable energy investment portfolio. The company has received direct approach and engagement with investors which has resumed strongly initiated by the challenges faced both within the SADC region and internationally for exports. “We look forward to receiving good news in this regard.” Shumba Energy is involved in major energy projects including, Morupule South Mine Project which produces export- quality coal for local and regional industrial users, Mabesekwa Power Plant which supplies electricity to South Africa, Sechaba Project which supplies electricity to Botswana and other southern African countries; the Solar Energy Project geared to build a scalable solar power plant; and Letlhakeng Underground Coal Gasification Project with a license to explore 1 000 square kilometres for coal resources.