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Botswana CBM power project approved

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World Coal,

Botswana-focused coalbed methane (CBM) developer, Tlou Energy, has been selected to develop a CBM power plant at its Lesedi CBM Project by the Botswana government.

The company is still expecting full details from the Ministry of Energy and Water Resources (MMEWR), but the project offtake agreement is expected to be for 50 MW – five times larger than the 10 MW power plant originally proposed by Tlou.

“We are elated by this decision and look forward to receiving the full details from the MMEWR,” said Tlou’s Acting Managing Director, Gabaake Gabaake.

Although we always planned to expand our project beyond the 10 MW initially envisaged as being fast-tracked for development, a 50 MW project is five times larger than expected and a fabulous result for the company. Importantly it provides more certainty to our investment case to increase power output as we develop our field.”

The news follows a recent announcement from the Botswana government that it would target the incorporation of 100 MW of CBM power into its future generation supply plans.

Reaction from the investment community has also been positive with Panmure Gordon saying Tlou was now in the “box seat for domestic power generation in Botswana”.

“As the government plans start to firm up, Tlou should be in a strong position to gain financing to see Lesedi move forward,” the broker said in note.

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