Shumba Coal has partnered with a South African firm, Mulilo Renewable Project Developments, for the joint development of the Mabesekwa Export Independent Power Plant (MEIPP), which will export power to the neighbouring country.
The MEIPP is a 300 MegaWatt (MW) energy capacity project with a minimum 260 MW net supply to grid after auxiliary and mine consumption. The project will entail building a coal-fired power plant with a captive coalmine, to take part in the South African Coal Base Load Independent Power Producers (IPP) programme. Last year, South Africa asked IPPs to submit proposals to build coal-fired plants as part of a string of initiatives aimed at ending chronic electricity shortages in that country.
In a statement released on Friday, the two companies noted that within a two month-period following the signing of the Heads of Agreement (HOA), they would enter into a comprehensive Joint Development Agreement (JDA), which shall include detailed conditions of the partnership.
“During this period, the parties will only negotiate exclusively with each other. Additional developments will be forthcoming and shareholders will be kept appraised accordingly,” reads the statement.
Shumba Coal Chairman, Alan Clegg said the agreement is a further development in Shumba energy development strategies. “The signing of this HOA with Mulilo is a further landmark development in Shumba execution of our stated strategy and a further testimony to the discipline of management in matching our assets and projects with the best partners under stressed market conditions,”
Mulilo is an IPP developer and investor which was originally formed in 2008 and has developed over the last few years a portfolio of 400 MW of grid-connected power plants under various IPP programmes run by the Department of Energy in South Africa.Shumba Coal intends to develop one or more 300MW or larger power stations in addition to producing coal for domestic and regional consumption. Recently Shumba coal entered into a binding sale and purchase agreement with Daheng Group Botswana for the acquisition of Mabesekwa Prospecting license near Francistown. This was part of its strategy of investing in Botswana based energy projects to supply affordable energy domestically and into the region. Among Shumba Coal energy projects includes 300MW Sechaba energy project near Morupule. Currently Shumba is in the process of the renewing another prospecting license number that will be finalised by the Botswana Ministry of Minerals, Energy and Water Resources.