Botswana to roll out coal bed methane power projects

>Mpho Tebele

GABORONE-AUSTRALIAN Stock Limited-listed company, Tlou Energy, announced this week that it has received a request for proposal from the Botswana government to develop up to 100MW of coal bed methane power in the country.

In a press statement, Tlou Energy Managing Director, Tony Gilby, said that the government has specifically asked for details of the proposed field development, installation of power generation facilities and supply of power into the national grid.

He said Tlou Energy was one of the two firms selected to bid for this project as an independent power producer. The closing date for the tender is 12 July 2017.

“We are pleased to receive the request for proposal (RFP) from the Botswana government and look forward to providing them with a detailed, compelling and compliant tender for our pilot power generation project,” he said.

The company states that it is focused on delivering power in Botswana and Southern Africa through the development of coal bed methane (‘CBM’) at its Lesedi CBM project.

Gilby said that the latest development follows a government announcement in June last year that the delivery of 100MW of CBM power be incorporated into its future generation supply plans.

Tlou Energy, which owns the most advanced CBM project in Botswana, achieved first independently certified CBM gas reserves status and Environmental Impact Statement approval in 2016.

“This is the next step in the path to a binding off-take agreement and is testament to the fact that the Botswana government remains committed to see CBM power projects developed in Botswana so that CBM can become a long-term indigenous source of cleaner energy for the country,” said Gilby.

He described the project as a scalable one, adding that being the first company in Botswana to achieve independently certified CBM gas reserves in 2016 as well as the first to receive Environmental Impact Statement approval, they are ready to deliver on their promises.

“Tlou Energy Limited clearly is well-placed to deliver on its objectives. We look forward to updating the market in due course as we make progress towards fulfilling our vision to become a significant provider of energy in Botswana and the wider region,” said Gilby.

He said the request for proposal from the government of Botswana to develop up to 100MW of power using CBM indicates the government’s commitment to facilitate the development of a CBM industry in Botswana.

“The proposed government power purchase agreement (PPA) will assist in fast‐tracking the development of the gas industry in the country and creates a new market for Tlou’s independently‐certified gas reserves and significant contingent gas resources of  approximately 3.3 trillion cubic feet (3C),” said Gilby.

He said, “As previously announced in July 2016, Tlou is one of two companies selected to bid for the development of up to 100MW of power using CBM in Botswana as an independent power producer. The company has now received a detailed request for proposal (“RFP”) from the Ministry of Mineral Resources, Green Technology and Energy Security.”

RFP requires details of the proposed field development, the installation of power generation facilities and supply of power into the grid in Botswana.

“The Botswana government has developed this initiative to allow companies such as Tlou to develop pilot plants and facilitate the development of their CBM resource to levels which may lead to the supply of gas to the Government owned 90MW Orapa Power Plant, which is situated approximately 150km to the north of Tlou’s Lesedi CBM project,” said Gilby.

He added that “It is a requirement of the RFP that all matters are kept confidential. However, the company will update the market where possible and specifically in relation to completion and submission of the required documentation.”

Last year Botswana’s Ministry of Minerals, Energy and Water Resources (MMEWR) recently announced that it had received approval from the Public Procurement and Asset Disposal Board (PPADB) to shortlist Tlou Energy and Sekaname Pvt Limited for the Coal Bed Methane (CBM) tender.

This also follows former Minister of Mineral Resources, Green Technology and Energy Security Kitso Mokaila’s announcement last year where he said that government is committing to an initial 100MW of gas power to be brought into the market.

“Given government’s proposal, our plan to initially develop a 10MW project is now even more tangible and the potential for being granted not only an off take for our gas, but to generate revenues by supplying much-needed power to the national grid provides even more encouragement that our project will be a success,” Gabaake Gabaake, Tlou Energy acting managing director said at the time.

Gabaake said at the time: “We are elated by this decision and look forward to receiving the full details from the government.

“Although we always planned to expand our project beyond the 10MW initially envisaged as being fast-tracked for development, a 50MW project is five times larger than expected and a fabulous result for the company. Importantly it provides more certainty to our investment case to increase our power output as we develop our field.”

Gabaake added: “A larger project also provides more options regarding project development as well as potential benefits from economies of scale.”

Emergency power request

In November 2015, the government issued a request to submit technical information for the supply of emergency power to address the country’s chronic power deficiency and to assist in fast-tracking the development of the gas industry in the country.

As a result of work still being done at the Morupule B coal-fired power station, Botswana has continued to                                       rely on imports from South Africa.

January 2017
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