Mmegi Online :: Morupule B bungle costs govít additional P5bn
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Monday 12 November 2018, 16:14 pm.
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Morupule B bungle costs govít additional P5bn

The bungling of works at the Chinese built Morupule B power plant has forced government to spend an additional P5 billion in remedial works and power imports, the Public Accounts Committee heard this week.
By Brian Benza Fri 09 Jun 2017, 18:00 pm (GMT +2)
Mmegi Online :: Morupule B bungle costs govít additional P5bn








Built by China National Electric Equipment Corporation (CNEEC), the 600MW plant was supposed to be fully completed by October 2012, but has not been fully operational to date due to technical faults forcing Botswana Power Corporation (BPC) to continue importing electricity.

Appearing before the committee on Tuesday, acting permanent secretary in the Ministry of Mineral Resources, Green Technology and Energy Security , Obolokile Obakeng said on top of the initial investment of $1.2 billion (P12 billion) for the construction of the plant and related transmission lines, an additional amount of P5 billion was spent, mostly on importing power to cover the deficit.

“An additional P5 billion was spent on top of the initial investment. Most of the money was spent on importing power,” he said. 

This brings the total investment in Morupule B and related power imports to around P17 billion, an amount that government is unlikely to recoup from the impending sale of the power station back to the Chinese contractors.

Negotiations between the government and CNEEC’s sister company China Machinery Engineering Corporation (CMEC), are currently on going over the sale of the power plant, after which BPC will buy power from the Chinese company through a Power Purchase Agreement (PPA).

Asked about the likelihood of recovering all the funds spent on Morupule B, Obakeng said the government’s strategy is to try and recover as much as possible from both the sale and the tariffs that BPC will buy power at.

“First, the

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sale is going to help us pay back the loan we took to invest in the plant. The plan is for us to try and get as much as possible from the sale, but also recover some of the costs by negotiating for a favourable tariff structure,” Obakeng said. Botswana is currently facing power supply deficit owing to diminished surplus generation capacity in the region and the growing electrical energy requirements in the country. 

This has been compounded by the low availability from the Chinese built Morupule B power station, which has a capacity of 600MW, but has available base generation capacity of an average 260MW. 

With the current peak demand standing at approximately 600MW, BPC said the supply gap is met through imports mainly from South Africa’s Eskom and some from Mozambique’s EDM.

The power utility also utilises two emergency plants with a combined capacity of 195MW when the imports are not available or when they are too expensive.

The cost of producing power from Morupule B is estimated at around 50 thebe per Kilowatt-hour (KWH) while imports average 115 thebe per KWH.

BPC plans to expand its 600MW Morupule B power station by another 300MW, but the project has been staled by a dispute over an $800 million guarantee between the contractors and government. Energy minister, Sadique Kebonang recently told BusinessWeek that granting the guarantee would need Parliament approval. Botswana’s Parliament is currently in recess and will sit in July.

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