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Tlou Energy lands gov’t P107m power tender

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KEABETSWE NEWEL

Tlou Energy, the dual listed company focused on delivering power in Botswana and Southern Africa through the development of coal bed methane (CBM) has been awarded a multi-million tender by Government to produce power using natural gas.

Tlou was shortlisted together with another competing outfit, Sekaname (Pty) Ltd which has since been defeated.

The company, listed on both the Botswana Stock Exchange (BSE) and the Australian Stock Exchange (ASX),used the electricity guide price provided by government in the Company’s tender of approximately USD$0.12 per kWh. At that price, the project, according to Tony Gilby, Tlou Energy Managing Director (MD), would generate gross revenue of approximately $10 million (P107.4 million) per annaum. Tlou considers the first 10MW as a pilot power generation project. “Revenues from this project could facilitate rapid future expansions, which could be enormous based on the Contingent Gas Resources already in Place at Tlou’s project acreage. The transmission line component of the downstream power generation project represents the bulk of the capex required and will be designed to transmit upwards of 20MW of electricity into the grid,” he added.

The company confirmed that they have won the Government tender they had responded to 7 months ago. The decision to select Tlou as the preferred bidder, for the development of a “Maximum of 100MW of Coal Bed Methane Fuelled Power Plants in Botswana,” is a huge step for the company in its journey to eventually supply power into the grid in Botswana. Although, the Company intends to start with a development that will produce up to 10MW initially, this would be an initial pilot power generation project that could lead to a rapid expansion.

In October 2018, the company submitted its comprehensive response to trhe Request For Proposal (RFP) for the ‘Development of up to 100MW of Coal Bed Methane Fuelled Power Plants in Botswana. The Company’s submission outlined a staged development commencing with up to 10MW of generation as well as outlining project feasibility, proposed field development, installation of power generation facilities and supply of power into the grid in Botswana. According to the company, the RFP was assessed across three different criteria, Compliance, Technical and Financial. Of the competing bidders, Tlou’s proposal received the highest pass mark for the compliance and technical stages. The financial stage required the calculation of a Levelised Cost of Energy (LCOE) for the project, with Tlou’s proposal having the most competitive LCOE. “This was possible due to Tlou’s ability to operate efficiently using very experienced personnel coupled with the geological knowledge gained over many years of operating in Botswana,” he said.

Upon successful completion of the initial, project, the Company will look to expand further. Tlou Energy boss said an initial 10MW development was selected to facilitate the success of the downstream project by requiring relatively minimal up-front capex. He said this reduces risks and therefore limits the downside for Tlou, its shareholders and the government. Botswana Public Officers Pension Fund (BPOPF) an institution under the stewardship of Principal Officer Boitumelo Molefe, has 47 230 769 shares of the enlarged share capital of the company, representing 10.49 percent holding of Tlou Energy Limited, making the fund, the largest shareholder.

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