Tlou raises P40m to advance gas-fired power project
Staff Writer | Tuesday March 28, 2017 15:52
Lesedi is set to become Botswana’s first project to derive electricity from gas (CBM). In a statement released yesterday, the company which is listed on both the London and Australian bourses, said it has placed more than 51 million shares at an issue price of 10 cents each, to investors in both countries.
Tlou’s managing director, Tony Gilby said: “This placement along with the recently announced agreement with Independent Power Corporation PLC provides significant momentum for Tlou to progress the upstream (gas field) and downstream (power and transmission) components of the Lesedi CBM project with the objective of supplying the first gas‐fired power in Botswana”. “We were very pleased with the introduction of a number of new investors to the company along with continued support from existing shareholders in Australia and the UK,” he added.
Last month Tlou said it had received a detailed Request for Proposal (RFP) from the Botswana government to develop up to 100MW of gas power.
The company has the most advanced CBM project in Botswana with an independently certified contingent resources of 3.3 trillion cubic feet (3C) at Lesedi making it the most likely to develop Botswana’s first CBM power project.
In a statement, the company said the RFP indicates the government’s commitment to facilitate the development of a CBM industry in Botswana.
The proposed government power purchase agreement (PPA) will assist in fast-tracking the development of the gas industry in the country and create a new market for Tlou’s independently certified gas reserves and significant contingent gas resources.
The RFP requires details of the proposed field development, the installation of power generation facilities and supply of power into the grid in Botswana.
The closing date for this tender is July 12, 2017. Tlou, which holds 10 prospecting licences covering an area of 8,300 square kilometres in Botswana, is one of two companies selected to bid for the development of up to 100MW of power using CBM as an Independent Power Producer (IPP).
The government has developed this initiative to allow companies such as Tlou to develop pilot plants and facilitate the development of their CBM resource to levels which may lead to the supply of gas to the state-owned 90MW Orapa Power Plant, which is situated approximately 150km to the north of the Lesedi CBM Project.
In 2015, government floated a tender inviting companies to express interest in the supply of gas to the Orapa 90MW power station.
The dual fuel power station is currently running on diesel and the tender is part of plans to convert the plant to CBM. This is expected to reduce the cost of producing electricity at the power station by up to 60%.
It is estimated that the two turbines of the power plant consume up to 17,000 litres of diesel per hour at peak use. Conversion of the power plant to CBM is estimated to the cost of producing electricity from 24 cents (P2.28) per kilowatts to about 10 cents (90 thebe) per kilowatt.
In the next five years, government hopes to deliver up to 800MW of power through IPPs using coal, solar and CBM resources.