Company look to address energy deficit in Botswana and beyond
Independent Power Producer, (IPP) Tlou Energy, which is building the country’s first Coal Bed Methane (CBM) gas-to-power plant, is currently in negotiations with the Botswana government over the purchase of power from its Lesedi Project.
This is according to the company’s annual report released this week, which outlined Tlou’s significant progress since being awarded a mining licence.
In May, the public listed entity, which is majority owned by Botswana Public Officers Pension Fund (BPOPF), was chosen as the preferred bidder for the development of the CBM gas-to-power plant.
The company’s chairman, Martin McIver hailed the development as a major milestone as it bids to become a regional power provider in Southern Africa through the development of its CM assets.
Having been selected as the preferred bidder for the project, McIver says Tlou is now in the final stage of the process, including discussions with government regarding the Power Purchase Agreement (PPA) ahead of commencing development work.
However, this is not the only available option for the company, as there are reportedly other potential off-takers in the region.
This emerged after Tlou was invited by the Ministry of Mineral Resources, Green Technology and Energy Security to submit a response under the Request for Proposal (RFP) for the development of CBM fuelled power plants as an IPP.
The proposal was for the development of CMB fuelled power plants of up to 100 megawatts.
During the previous financial year, the company completed the drilling of pilot wells in the Lesedi Project area, which are said to be currently producing CBM.
However, it is not clear whether the gas rates from these wells will be sufficient for commercial development of the project.
It is worth noting that once the initial development is complete, Tlou plans to connect its gas fields to the regional grid, which will open up possibilities of providing power across the region through the Southern African Power Pool (SAPP).
Tlou, which holds 10 prospecting licences as well as a mining licence, has also received environmental approval for up to 20 megawatts of CBM power generation.
This includes the drilling of 200 production ponds, a 66 kilovolts transmission line and a solar farm of up 20 megawatts.
With no previous developments of CBM in Botswana, McIver believes successful results from its projects could potentially impact a whole CBM basin and be a significant boost not only to Tlou but to the whole region.
As the company is still in the initial stages of development and thus no revenue has yet been earned from its activities, Tlou has announced a loss amounting to P32 million, a massive increase from the P28 million registered as loss in the year ended June 2018.
It meant that once again shareholders walked away with nothing as no dividend was declared or paid during the financial year.