Shumba weighs options on Eskom tender
Isaac Pinielo | Thursday December 18, 2014 11:03
On Friday, South Africa asked Independent Power Producers (IPP) to submit proposals to build coal-fired plants as part of a string of initiatives aimed at ending chronic electricity shortages in that country.
The bidding process was opened on Monday. “We are indeed aware of the tender. At this stage we are in the process of reviewing the tender documents in order to determine if our participation would be appropriate,” said Mashale Phumaphi, managing director of Shumba Coal.
With a large coal resource in Botswana, Shumba is well placed to take advantage of the massive potential for developing power projects in southern Africa.
The company, which is listed on the Botswana Stock Exchange (BSE), is currently developing the Sechaba Energy Project (SEP) near Morupule. The company earlier indicated that it was assessing the viability of exporting power from its proposed 300MW plant at its SEP, near Morupule. It described options available to export power from the SEP to South Africa, Zimbabwe and Namibia.
Shumba, which is majority citizen owned, joins other firms such as African Energy Resources and Jindal Steel and Power, that are making strides towards monetisation of Botswana’s estimated 212 billion tonnes coal resources through exports of cola and power.
In 2012, Jindal acquired Canada-listed coal company CIC Energy that has coal assets in Botswana. Before the mega deal collapse amid confusion in 2008, CIC was poised to build a 1200-megawatt (MW) power plant at Mmamabula for export to South Africa.
Jindal was also said to have already acquired stakes in coalmines in South Africa, Mozambique, Australia and Indonesia.
Jindal company head in Botswana, Tony Zebert, was also not available to comment at time of going to press. On the other hand, the director of development at African Energy, David Edwards said he was yet to find out about the tender, seeking offers from independent power producers to build coal-fired plants.
African Energy acquired the Mmamabula West project in December last year due to its relatively high onsite coal quality and perceived potential as a source of export coal.
African Energy’s most advanced project, the Sese Power Project is currently the subject of a takeover by First Quantum, which will eventually result in the plant exporting power to Zambia. According to a tender notice posted in South African newspapers bidders for the Eskom tender will be expected to pay a non-refundable fee of R200, 000 (P163, 000) when they submit proposals to build, operate and maintain the new coal plants. The SA government will give the winners a power purchase agreement (PPA) with struggling state utility Eskom.
South Africa suffered its worst power shortages in six years this month due to creaking power plants and emergency maintenance.
Eskom is faced with a $20 billion funding shortfall over the next four years, forcing the South African government to consider selling state assets to bail out the utility.