BOL upbeat as Coal to Liquids tender closes

Mbongeni Mguni | Monday March 4, 2024 06:00

Value added: The envisaged plant would supply more than 50% of the country’s annual consumption by converting coal to a number of other chemicals PIC: PHATSIMO KAPENG

Bids closed on Thursday and on Tuesday, a senior BOL executive hinted that a healthy number of firms had submitted expressions of interest ahead of the February 29 deadline.

“We have received quite a number of companies expressing interest, wanting to develop this and we will be looking forward to the next stage when they will receive the Request for Proposal and respond to it,” BOL’s senior manager (New Ventures) Gamu Mpofu told an energy conference on Tuesday. “This is a major undertaking, a huge project and it requires us to have the right partner who can deliver it.”

The BOL executive, however, did not give any details on the bidders' number, names or countries of origin.

The eventual private sector partner chosen for the project will be expected to design, build, finance operate, maintain and transfer the plant, after an off-take agreement, between 25 and 30 years with the state oil firm.

Known as Ikaegeng XTL, the ambitious multi-billion pula project has been in the works for about a decade and has climbed up the levels of priority in government. A previous attempt by government to self-finance the project was abandoned in July 2021 in favour of the PPP arrangement. At that time, Botswana Oil had a list of 11 companies, which it later whittled down to a shortlist of two.

The push to accelerate the country’s fuel sources comes as local supply comes under pressure from troubles in South Africa’s refining capacity. South Africa, which supplies nearly all of Botswana’s petroleum products, has suffered a rapid loss in refining capacity with several major plants suspended or ageing out of use.

Mpofu explained that potential partners would be narrowed down to a single preferred bidder, backed up by a reserve bidder, in months to come.

“Within the first six months of receiving the Request for Proposals, the bidders will have to give us a concept proposal. “We will then select one bidder from that and another as a reserve bidder. “The preferred bidder will work with us to develop the bankable feasibility study and work with us up to realising the project,” he said.

Mpofu revealed that the Public Procurement Regulatory Authority had granted BOL a waiver for negotiations and direct engagement with bidders in recognition of the complexity of the project.

The progress on Ikaegeng comes as Botswana Oil prepares to take over 90% of the country’s fuel imports, a move authorities say will boost its ability to secure the best price, improve stability and diversity of sources and allow for citizen economic empowerment in the sector.

BOL is expected to take over from April 1.