Planned 300MW power station steams ahead

MBONGENI MGUNI
Staff Writer | Tuesday June 22, 2010 00:00

The MDPP, which is being developed by Golden Conchord Holdings and CIC Energy, will tap into a section of the estimated two billion-tonne coal resource within the Mmamabula Energy Project to power the planned power station. The Mmamabula Energy Project, which CIC Energy and other partners are developing alongside the MDPP, envisages a 1200-megawatt (MW) power station and associated coalmine separate from the smaller MDPP.

Finalisation of the financials related to the MDPP is critical in enabling the developers to produce a tariff proposal to BPC, which is being targeted as the sole off-taker of supply. Securing a Power Purchase Agreement with BPC will enable CIC Energy and its equity partner to source funds and progress the MDPP towards commissioning. The Power Purchase Agreement will also allow MDPP's developers to submit an application for a coal mining licence to Government.Last week, CIC Energy SA's Chief Operating Officer (Mining), Eddie Scholtz told Mmegi that geological and technical studies related to the MDPP were nearing finalisation, paving way for the financial assessments. He explained that four years of various studies already done for the main Mmamabula Energy Project (MEP) had helped fast-track certain elements of the MDPP.

'Studies relating to the geology of the coal mine have been done, the mine design is about 90 percent done and the power station design is between 80 and 90 percent done,' Scholtz said. 'Infrastructure studies, such as the water and power supply, are between 70 and 80 percent done, having been assessed under MEP. 'The technical work is largely complete. What we are doing now is the costing of the mine, the power station and the infrastructure, all of which will go into a financial model together with the shareholders and lenders. Out of that, we will get a return on capital invested, then produce a tariff proposal for BPC.'Scholtz said CIC Energy and its equity partner were working on timelines for MDPP, which include targets for the financial close, submission of a tariff offer to BPC and various regulatory approvals. 'We are not very far from getting the financial tariff numbers together, internally first and then after, submit them to the BPC,' he said. 'This could be within the next few weeks. We believe that internally, we will have our numbers within a few weeks, but there are other issues like discussions with the government and briefing them on our progress. Government is a key party to finalising certain documents and agreements and we hope this could be done within a short period. They have said they are keen to finalise these discussions.' The Managing Director of CIC Energy Botswana, Dale Ter Haar, explained the key role Government would play in moving MDPP towards commissioning. 'The next few months are focussed on securing approvals and funding,' Te Haar said. 'This project is steaming ahead.

'The biggest issues we have externally are the formal submission to Government through BPC and the formal mining licence. The government has shown unwavering support for this project and it realises that it needs independent power producers in the market.  This is an exciting time for the power industry and we are glad to be at the forefront of it in Botswana.' CIC Energy and Golden Conchord hope to commission MDPP by 2014, buttressing Botswana's growing energy needs.