African Energy targets 300mw tender

MBONGENI MGUNI
Staff Writer | Friday May 3, 2013 00:00

 

Within a fortnight, government is expected to float a Request for Pre-Qualification for energy firms interested in developing the 300mw power station. The tender for the greenfield power station follows the one for a 300mw brownfield government released in mid-April.

By definition, the greenfield power station can be built anywhere in Botswana. It can conceivably be powered by any fuel source, while the brownfield is an extension of Morupule B station and is fired by coal. On Tuesday, African Energy Resources (AFR) became the first among several local energy developers to announce its intentions for the lucrative supply tenders. AFR holds coal resources of up to 2.5 billion tonnes at Sese, near Francistown and is advancing studies for both coal mining and electricity generation.

'African Energy will submit a Request for Pre-Qualification proposal for the greenfields power station in due course,' the Australian company said.According to AFR managing director, Frazer Tabeart, the firm's bid for the greenfield will be made through Sese Power Limited, its fully owned special purpose vehicle established to drive its electricity project.

Tabeart explained that while Sese Power is in talks with a regional utility for the offtake of 300mw from Sese, the coal resource is sufficient to supply more similar sized power stations. Each of the power stations, including the facility targeted by the ongoing negotiations, will be supported by a dedicated 1.5 million tonne per annum coal mine and all related infrastructure required to deliver electricity into the regional grid.

Tabeart said one area within AFR's prospecting licence known as Block C has a measured resource of 330 million tonnes of coal, which is enough to power eight 300mw power stations for 30 years. 'The company is also currently in advanced discussions with four global strategic groups who have expressed interest in investing directly into Sese Power Ltd. The company is pursuing multiple opportunities to sell the electricity from one or more 300mw power stations,' he said.  Earlier in the week, African Energy announced it was taking over the 1.3 billion tonne Mmamantswe energy project from fellow Australian developer, Aviva Corporation. The deal will see AFR resource holdings rise to 3.8 million while an associated financing agreement will raise its working capital to Aus$6 million (P51 million). The stronger funding and bigger resource place the AFR in a strong position in the scramble for the 300mw tenders. Other front-runners include Jindal, which last year acquired CIC Energy and took over the rich Mmamabula coal-fields. Prior to its acquisition, CIC Energy had developed detailed technical and financial plans for a 300mw power station fired by 1.3 million tonnes of coal per annum.

Senior government officials have said factors such as technical and financial capability, work experience and qualification of top personnel and proposed capital and operating costs, will be key in deciding the winners of the two 300mw tenders.