Botswana turns inward on power

SHARE   |   Wednesday, 04 November 2015   |   By Othusitse Tlhobogang

A $4.5 billion coal-to-liquid fuels, fertiliser and power plant planned in Botswana could raise the country’s installed electricity capacity by at least half, cutting reliance on imports from neighboring South Africa.
United Refineries Botswana, through its Coal Petroleum unit, and Johannesburg-based Kumvest are planning to develop the project in Francistown, 430 kilometers (267 miles) northeast of the capital, Gaborone, Holland & Hausberger, the technical partner on the project, said in a statement on its website. Once complete, the facility will deliver at least 304 megawatts of electricity to the national grid and produce 20 000 barrels of fuel daily.
“Botswana imports 85 percent of its energy needs and it would be a no-brainer to localise supply,” Kumvest Chairman Mandla ‘Bear’ Kumalo said by phone. His company has provided an initial $3 million for the first stage of studies on the project. “The legislative regime in Botswana is quite consistent and we saw that as a fantastic opportunity to invest.”
Botswana has resorted to restricting power supply as breakdowns and maintenance at the nation’s sole electricity plant forced it to run at about a third of its capacity. Electricity imports from neighbouring South Africa were disrupted this year as Eskom Holdings, the Johannesburg-based state-owned company, implemented rolling blackouts because of insufficient supply to meet South Africa’s needs.
The partners foresee annual production of 300 600 metric tons of ammonium nitrate, which is a fertilizer used on crops, and 15 200 tons of sulfur.
The companies have secured a site for the facility, completed economic and technical assessments, and obtained funding for a bankable feasibility study. Technologies have been shortlisted and work on a preliminary engineering design is progressing, Holland & Hausberger said in an e-mailed copy of a presentation.
The project may be 70 percent debt funded, with the rest coming from equity, Holland & Hausberger Chief Executive Officer Brendon Hausberger said by phone. Export-Import Bank of China and the Export-Import Bank of the US “want to participate,” and talks are “fairly well advanced,” he said by phone from Johannesburg Tuesday.
Morupule Coal Mine will open a dedicated seam to provide feedstock for the facility, which will require 4.4 million metric tons of coal annually, Hausberger said. MCM is owned by the Debswana Diamond Company., which is a joint venture between Anglo American’s De Beers unit and Botswana and operates the world’s biggest mine for the gems by value. [Bloomberg]

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