US helps out Kalahari Energy's P6bn CBM project

Mbongeni Mguni | Friday March 20, 2020 15:00

Although Kalahari Energy CEO, Chris Scales declined to detail the grant amount, he said it was significant enough to finalise the feasibility for the project.

The project is expected to cost P6 billion and is dependent on Kalahari Energy and the government finalising a Power Purchase Agreement (PPA) for supply.

“All the environmental scoping studies have been done and we are just waiting for the Environmental Affairs Department who are going through, viewing the documents,” Scales told BusinessWeek. “They will put up an advert soon on that.”

USTDA acting director, Thomas Hardy said the grant was part of the agency’s plan to help enhance Botswana’s energy security and economic growth. “This project will build upon USTDA’s commitment to working with our partners in Botswana to develop and expand the country’s natural gas options,” he said. For his part, US ambassador to Botswana, Craig Cloud described the project as possibly “the first step towards energy independence for Botswana.”

Even as the feasibility is being finalised, Scales and his team are focussing on finalising the PPA with government. Kalahari Energy is one of two firms announced as preferred bidders by government for its pioneering 100MW CBM procurement project. “I would love the timeline to happen very quickly, but it’s a complicated transaction,” Scales told BusinessWeek.

“We will be starting (talks) this month with government and hopefully they will be concluded as soon as possible.”

On Monday, Minerals minister, Lefoko Moagi told legislators government was engaging transaction advisors from the African Legal Support Facility to help government negotiate the PPA, due to its complexity.

“Negotiations are scheduled to start by March 2020. “The transaction advisors will capacitate the government negotiation team members and prepare toolkits for the CBM PPA,” he said, in his Committee of Supply presentation.

Kalahari Energy has an independently certified resource of 10.8 trillion cubic feet of CBM at its project.