Coal to Liquids deal expected by next December
Pauline Dikuelo | Monday August 15, 2022 06:00
Known as Ikaegeng XTL, the ambitious project aims to tap into billions of tonnes of coal lying untapped in the country, with technology applied to produce various petroleum products for domestic use. Previous estimates indicated that the project could cost $2.5 billion (P31.4 billion).
BOL spokesperson, Matida Mmipi told BusinessWeek that Requests for Proposals (RFP) were due to be floated in the market by the end of next month seeking private partners to participate in the project.
The project will be developed as a Public Private Partnership (PPP) model using the design, build, finance, operate, maintain, and transfer model.
“Responses to the RFPs will take a significant time to be developed and it is anticipated that an agreement could be finalised by December 2023,” Mmipi said in an emailed response to enquiries. “It will be noted that issuance of the RFPs to the market involves several engagements with key stakeholders including government for alignment which is ongoing.”
She added: “We are currently undertaking a procurement process to identify and enter into a PPP agreement with a private sector partner for the facility. “A comprehensive PPP feasibility study report was concluded mid-2020.”
BOL has, meanwhile, engaged Hatch, an international consulting firm as technical advisors for the project. Mmipi said the technical advisers are assisting BOL to develop the project through various phases of the project development path.
“Technical advisors are experts in a specific field and therefore offer advice to BOL in the field since Botswana is embarking on a Coal to Liquids industry venture for the first time. “They coordinate the activities that lead to the realisation of the project in partnership with BOL,” she said.
The latest developments come after the initial bid to kickstart the project failed in 2017. At the time, 11 companies had submitted bids and only two companies were shortlisted after having met the required criteria for pre-qualification.
According to Mmipi, these two firms “were pursued” up to July 2021, when the process “was aborted”.
“This has now been replaced by the new RFPs, which are being developed and finalised,” she said.
Details shared by the state oil utility indicate that the envisaged plant could be required to produce 12,000 barrels of oil per day over a lifespan of 30 years. BOL officials previously told BusinessWeek that Ikaegeng could potentially produce up to 80% of the country’s annual fuel consumption of 1.2 billion litres.
BOL’s studies also show that just over 1,500 jobs could be created during the construction phase, with 1,420 jobs during the plant’s operational phase. The plant could contribute more than P1 billion per annum in various taxes to the government.