Shumba Energy : QUARTERLY MARKET UPDATE – 31 MARCH 2023

Suite 204

Grand Baie Business Quaters

Chemin Vingts Pied

Grand Bay, 30529

Republic of Mauritius

(A public company registered in the Republic of Mauritius - Company No. 111905 C1/GBL)

QUARTERLY MARKET UPDATE - 31 March 2023

Shumba Energy Ltd ("Shumba" or the "Company") is an energy development company based in Botswana and listed on the Botswana Stock Exchange (BSE: SHUMBA). The Company offers the advantage of being based in a country with the best credit rating in sub-Saharan Africa with a stable fiscal and political setting. Established in 2011, the company is reaching its development objectives and controls a significant portion of advanced energy projects in Botswana. Shumba is developing a portfolio of Projects servicing energy poor Southern Africa with emphasis on state-of-art technology deployment and low impact emissions.

For Shumba "Powering the Future" means addressing the growing power deficit in the face of collapsing utility companies in the region and supplying energy to affected southern African countries in a sustainable and cost-effective manner. The Company's main activity areas include development of production and trading/export of thermal coal, near term generation of renewable energy, medium term generation of base load energy from 'HELE' (High Efficiency Low Emissions) thermal power plants, and medium-long term production of Liquid Fuels using state-of-art STL (Solids to Liquids) technologies with experienced partners.

Shumba Energy has several energy assets in the advanced development stage as follows:

TATI SOLAR PV PROJECT - Ownership:80%

Shumba has successfully secured rights to a world-class 100 MWp solar PV project near the city of Francistown, Botswana, and is currently in the advanced stage of developing the solar farm on a 295- hectare (ha) project site owned by the company. The project is a strategic initiative that holds significant importance in the region. As previously reported, Shumba has obtained essential environmental approvals from the Departments of Environmental Affairs and acquired a generation license for the project from the Botswana Energy Regulatory Authority (BERA). In addition, the Special Economic Zone Authority has granted a 50-year special economic zone (SEZ) status to the project, further enhancing its value.

Despite the ongoing war in Ukraine and the resulting global economic crisis, the company has made commendable progress on the flagship 100MW Tati Solar Project. By navigating through uncertain economic times and unfavorable capital markets, Shumba has strategically focused on securing funding for the Tati Solar Project, which will unlock the foundational value for the company. The Tati project has generated considerable interest from capital providers due to its positive sentiment.

Tati Project Financing:

During the quarter Shumba, through its renewable energy subsidiary, entered into a binding mandate

agreement with a leading commercial bank, which will act as the lead arranger, financier, and underwriter for the 100MW Tati Solar Project. The commercial bank in question is a well-established investment bank and a major player in the African corporate and investment banking landscape. By underwriting debt finance, the bank will provide 65% - 70% of the funding to the Tati Solar Project.

Shumba has also formed a strategic partnership with a Private Equity fund specializing in Africa's renewable power sector. This collaboration will supply the equity component of the funding for the project and further bolster the project's financial foundation.

Expenditures

The project development expenditures for the quarter were as follows;

All figures in USD
Description	Expenditure
Site Development	20 384
Technical Consulting	4 751
Legal	39 500
Insurance	20 380
Financial Advisory	37 000
Accounting & Auditing	68 125
Other Development Costs	63 830
Land Leasing	25 976
Total	279 949

SECHABA PROJECT - Licenses: Prospecting License 053/2005 & 218/2016; Ownership: 100%

Shumba Energy holds 100% in the Sechaba Natural Resources Proprietary Limited ("Sechaba"), which owns the Sechaba coal mining project situated in the Morupule coalfield in Botswana. The project's prospecting license, PL218/2016, was renewed by the Department of Mines for a further 2 years, until 30 September 2024. This will allow the company to complete the necessary development on the license in preparation for application for a mining licence based upon the completed pre-feasibility study (PFS) and approved ESIA and is awaiting the land rights award for the surface infrastructure to enable issue of the mining right to commence with project execution and mining.

The project PFS completed indicated the optimal solution is to develop a 2 x 150MWp 'HELE' circulating fluidised bed coal fired power plant known as the Sechaba Independent Power Producer Project ("SIPPP")

The company is in positive discussions and negotiations with two well-funded parties who understand the regional business case for further development of Coal Fired HELE power plants for adding base-load power into the grid. The company expects to make further definitive announcement in this regard by end of the financial year

MORUPULE SOUTH RESOURCES PROJECT - License: Prospecting License 121/2010; Ownership: 97.5%

Morupule South Resources Limited ("Morupule South") holds the exploration licenses over the Morupule South Project. The Project situated between Palapye and Serowe, in the central eastern district of Botswana, and lies immediately south of state owned Morupule Coal Mine within the hub of the extensive power transmission grid, with a new 440kV connection node having been installed within the area. Morupule South has submitted the Environmental and Social Impact Assessment (ESIA) for review by the Department of Environmental Affairs and approval, also a pre-feasibility study (PFS) is completed for the first Mine project on an area circa one quarter of the licenced rights on the shallowest part of the resource amenable to Open pit mining.

The project's prospecting license, PL121/2010 was renewed by the Department of Mines for a further 2 years, until 30 September 2024. This will allow the company to complete the necessary development on the license in preparation for application of the mining license.

Discussions are continuing with at least two parties interests in developing the project for further base- load power generation to be added for cross border supply to ease the SADC regional and growing net power deficit As in the case of Sechaba the company expects to make further definitive announcement in this regard by end of the financial year

TWO MABESEKWA PROJECTS - License: Prospecting License 428/2009; Ownership: 65% & 80%

The Mabesekwa project area contains two elements, the Mabesekwa No.1 Mine and Independent Power plant to be developed within subsidiary Kibo Energy Botswana Pty Ltd (65% owned) and the Mabesekwa No.2 Mine and Ikaegeng Coal to Liquids Plant to be developed under the subsidiary Coal Petroleum Ltd (80% owned).

The Mabesekwa Export Independent Power Project ("MEIPPP") is planned to be a 600MWp mine-mouth power plant configured as a 4x150MW 'HELE' coal fired power plant with a minimum 25-year operating life with ability to expand development to 1200MWp.

The Mabesekwa No.2 Mine is planned to be developed to feed the Coal to Liquids (CTL) Plant facility to produce minimum 25,000bpd clean burning liquid fuels and associated petrochemical by-products. In the reporting period The company has reengaged both with major petrochemical companies with respect to products offtake and distribution across the SADC regional markets, and Botswana Oil Corporation who have re-entered the playing field with a proposal for a majority Government supported initiative to make Botswana self-sufficient in liquid fuels

The quarterly reporting to the department of mines is as follows;

All figures in USD

	PL053/2005			PL218/2014		PL121/2010
		Direct			Direct
Direct Expenditure		Expenditure			Expenditure
Drilling	-	Drilling	-		Drilling	-
Geotechnical	-	Geotechnical	-		Geotechnical	-
Environmental	-	Environmental	-		Environmental	-
Consulting	-	Consulting	-		Consulting	-
Total	-	Total	-		Total	-
Indirect		Indirect			Indirect
Expenditure		Expenditure			Expenditure
Salaries and		Salaries and			Salaries and
Wages	16 704	Wages		8 352	Wages	16 704
Travel &		Travel &			Travel &
Accommodation	-	Accommodation		-	Accommodation	-
Administrative		Administrative			Administrative
Costs	11 005	Costs		5 503	Costs	11 005
Financing Costs	108 909	Financing Costs		54 455	Financing Costs	108 909
Total	136 618	Total		68 310	Total	136 618

Additional Information:

• The development activities per license and money used per activity in the quarter is disclosed in the table herein above. It is to be noted that prudently the company continues to limit external project development expenses in favour of continuing as much work as possible utilising internal resources of its professional experienced employee team.
• The quarterly cash flow update is attached herewith.
• The abridged unaudited financials for 2022 ended 30th June 2022 were published in September 2022 and the final audited financials are well progressed and we expect them to be published at the earliest.

By order of the Board

This Announcement is issued, in compliance with the Botswana Stock Exchange Equity listing requirements and pursuant to Section 87 of the Securities Act 2005, Rule 5 of the Securities (Disclosure Obligation of Reporting Issuers) Rules 2007.

The Board of Directors of the Company accepts full responsibility for the accuracy of the information contained in this Announcement.