UK firm to source funding for Bots’ coal-gas power plant

Mar 27, 2017

By Mpho Tebele

GABORONE – A United Kingdom-based power development company, Independent Power Corporation (IPC), has committed to secure funding for the development of the 100 MW coal-gas-power station in Botswana.

Coalbed methane (CBM) specialist, Tlou Energy, has signed an agreement to jointly develop the proposed power project (IPP Project) in Lesedi CBM.

This follows Tlou’s initial announcement that it has been invited to tender for and develop a CBM power plant of up to 100 MW.

The application process involved approval by Botswana’s Cabinet, after which it was reviewed by the Public Procurement and Asset Disposal Board and then the receipt of the request for proposal from the Ministry of Mineral Resources, Green Technology and Energy Security.

Tlou Energy, which prides itself as a company that is focused on delivering power in Botswana and Southern Africa through the development of coal bed methane will require at least one billion pula to develop the power station and other infrastructure such as gas pipe lines.

Tlou and IPC will jointly finalise work on a detailed proposal for submission to the ministry for the supply of CBM power in modular stages, including negotiations with various third parties on the terms of an off-take agreement, network access and project funding.

The IPP Project will be supplied with gas from Tlou’s Lesedi CBM project in Botswana.

Tlou Managing Director, Tony Gilby, said: “Tlou is strengthening its position as the leading gas-to-power company in Botswana with the announcement of IPC as our preferred development partner.

“IPC brings power generation experience and funding partners to the project that significantly enhances its viability. With an expanding gas reserves base, environmental approval for the upstream component of the proposed development and now a power development partner, we are in a very strong position.”

IPC has already started discussions with its project development and funding partners and also received letters of interest from selected parties for securing funding support.

Tlou and IPC’s strategy with respect to the RFP Tender comprises; an initial pilot power project of up to 10 MW of generation capacity (using modular reciprocating engines), grid connection of the initial project and expansion up to 100 MW of generation capacity and associated infrastructure (using gas turbine units that can be installed in a combination of open and combined cycle configuration, many of which are currently operating successfully throughout Africa).

Under the agreement, IPC is further to arrange funding on behalf of the IPC and Tlou sufficient to support the RFP Tender. The proposal also includes negotiations with various third-parties on the terms of an off-take agreement, network access, and project funding.

IPC and Tlou will also bear its own costs in fulfilling its obligations under the agreement, as well as commit to fund half of external costs incurred to prepare the RFP Tender, up to US$200,000.

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March 2017
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