By Mpho Tebele
GABORONE-AFRICAN Energy (AFR) is optimistic that three large-scale power projects being developed in Botswana could ease power shortages in Southern Africa.
African Energy, which has built a portfolio comprising over 8.5 billion tonnes of thermal coal in three projects in Botswana, says strong regional demand for power is linked to population growth and increased standards of living.
In a detailed report, AFR says all three projects are being developed as 300-600MW fully integrated power projects to supply the chronically power starved Southern African Development Community (SADC) region.
The three projects are Sese JV, which has 5 billion tonnes of coal deposits; Mmamabula West with 2.4 billion tonnes and Mmamantswe with about 1.2 billion tonnes of coal.
“Sese JV, which is managed by First Quantum Minerals Ltd, is targeting power sales to Zambia while Mmamabula West has a term sheet executed with a South African developer to enter into a joint venture agreement to rapidly progress a 600MW power project for South Africa,” the company says.
AFR says an agreement to sell Mmamatswe to South African developer, TM Consulting, for US$20 million is at financial stage.
The shortages of power in Southern Africa are due to several challenges that vary per country.
In Botswana, the newly-built Morupule B power station continues to experience breakdowns of its boilers.
South Africa’s power woes came as a result of the state utility Eskom’s inefficiencies. New Eskom mega-stations are beyond schedule and over budget, renewable energy projects are not enough to meet the supply shortfall prompting the South African government to commission tenders from Independent Power Providers for coal based-load projects up to 600MW.
In Zambia and Zimbabwe, power shortages have been made worse by the El Niño-induced droughts. The two countries’ over-reliance on hydro schemes has been massively impacted by the current drought resulting in major supply side constraints. Zambia is currently importing power and using diesel.
Touching on regional power demand, the company forecasted a strong growth of population hence an increase in demand for power.
“Sub-Saharan Africa (SSA) has highest forecast population growth globally; forecast growth in power demand is linked to population growth and rising living standards. Population is forecast to double between 2010 to 2050, with energy consumption forecast to double in same period,” said AFR.
AFR added that this is driving large procurement programmes, citing South Africa’s Integrated Resource Plan (IRP).
The company cited the Zambian hydro-electric projects (comprising 80 percent of Zambia’s installed base load capacity) which it said are struggling during droughts.
Another industrial demand, the company said, relates to South Africa formally seeking 3,750MW via cross-border, coal-fired, IPP procurement programmes.
AFR said it is well placed to supply these markets due to geographic proximity and abundant low-cost coal which provides fuel security.
It said key infrastructure is already in place adding that a well-developed regional interconnected transmission grid allows wheeling of power throughout the region via the Southern Africa Power Pool, with a number of key upgrades already planned.
Giving an overview and update on the three project, AFR revealed it has a deal with First Quantum Minerals Ltd (FQML) in which the latter will invest up to US$20 million in the Sese JV project.
It said large diameter drilling programme has commenced and will collect 1,000kg of coal for combustion testing and physical handling test work leading to the finalisation of the fuel specification for the proposed power station.
Preliminary power station design and layout will commence later this year and preliminary geotechnical evaluations of proposed power station and mine infrastructure sites are underway.