Morupule A refurbishment to cost P2.5 billion

Kimu00a0Dae-soo  and Jacob Raleru
Kimu00a0Dae-soo and Jacob Raleru

A top South Korean power equipment maker, Doosan Heavy Industries and Construction says it has won a $204 million (P2.5 billion) tender to refurbish the mothballed Morupule A power plant.

The awarding of the tender follows months of controversy after government and the Botswana Power Corporation (BPC) were accused of running a parallel procurement process with Doosan while another tender on the same project was still out.

The power plant, which has been shut down since 2012, has a total capacity of 132 megawatts comprising four generators producing 33 megawatts.

Under the deal, Doosan Heavy Industries will replace and repair key parts, such as turbines and boilers in the Morupule A power plant over the next two years to improve performance.

 “We have implemented the strategy to diversify the markets and finally have tapped into the new markets including Turkey and Botswana, this year.

With the latest contract, we are planning to actively target the Southern African power plant market, which has great growth potential,” Park Heung-Kwon, head of Doosan’s turbine/power plant business group, said.

The power station plant’s availability progressively dropped from over 84 percent in 2008 to below 30 percent in 2012, forcing the mothballing.

Two studies by government and the BPC have indicated that the station can be brought back to design level capacity through refurbishment of boilers, turbines, generators and other equipment.

Once refurbished, Morupule A could run for another 15 years at 80 percent plant availability.

Enquiries sent to the Ministry of Minerals, Energy and Water Resources (MMEWR) had not been responded to by the time of going to press.

The awarding of the Morupule A tender comes hardly a week after another South Korean firm, Posco Energy together with a Japanese firm emerged as the favourites to win a P8.1 billion tender to expand Morupule B power plant by a further 300MW.

The JV was named the preferred bidder to expand the Morupule B Power Station by a further 300MW at a cost of $800 million (P8.1 billion).

Pending finalisation of negotiations on the Power Purchase Agreement (PPA), construction of what would be Botswana’s maiden project under the Independent Power Producer (IPP) model is expected to start late next year with the first electricity seen kicking into the national grid by May 2020.

Unlike in the 600MW Morupule B plant, in which government funded the project for  $970 million, construction of the new 300MW will be solely funded by the developers.

The companies will then recover their costs by selling power to the BPC through a 30-year power purchase agreement.

The new Morupule B plant, which is expected to take three years to build, will lift power generation to more than 1,000MW, well above a national demand of about 610MW.

To feed into the expanded power plant, Morupule Coal Mine (MCM) has started preparatory work towards establishment of a new one million tonnes per annum open cast coal mine.

The open cast mine, which will be built adjacent to the existing underground operations, is projected to be completed by 2017.

MCM’s underground mine currently produces up to 3.2 million tonnes per annum with the bulk of the coal feeding into the Morupule B plant.

Another tender for a 300MW Greenfield power plant is also out, which will take local power production to 1,200MW  in the next five years and help the country wean off South Africa’s electricity supply.

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