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Tlou Energy requested to re-tender CBM fuelled power plants

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World Coal,

Tlou Energy Limited – the company focused on developing gas to power projects in Botswana and southern Africa through the development of coalbed methane (CBM) natural gas – has received confirmation that the Ministry of Mineral Resources Green Technology and Energy Security has requested that the Request for Proposal (RFP) for development of up to 100 MW of CBM fuelled power plants in Botswana be re-tendered, with the two bidding companies, including Tlou, invited to submit bids under a new re-tender process.

The decision to cancel the original RFP and re-tender has been approved by the Public Procurement & Assets Disposal Board (PPADB) in Botswana as set out as follows: ‘Ministry of Mineral Resources Green Technology and Energy Security (MMGE) request for cancellation of the tender for development of a maximum of 100 MW CBM fuelled power plants in Botswana and re-tender by shortlisting the same two bidders who had bid for the tender being Tlou Energy Limited and Sekaname (Pty) Ltd.’

The Ministry of Mineral Resources Green Technology and Energy Security will debrief the two bidding companies on Wednesday 14 February 2018 in relation to the original submission and the planned re-tender process. Thereafter further information will be available, and the company will convey this information to the market as soon possible. Should an RFP re-tender be announced as referred to in the PPADB statement, the company will assess this in detail before making any further decision to participate in the re-tender process or not.

Whilst the company has been awaiting a response from the RFP process, in line with its stated aim of becoming a regional power producer, it has continued to pursue other potential options for the sale of Tlou's gas or power in the southern African region.

These other opportunities will continue to be developed as a priority. Developing the project, securing offtake agreements with third parties, connecting to the grid and selling or wheeling power regionally is potentially a simpler option which can be better controlled by the company. As Botswana is part of the Southern African Power Pool (SAPP), Tlou is not restricted from connecting to the grid in Botswana and supplying power via wheeling arrangements to other SAPP member states.

The company has already commenced a market study to provide information on the power sectors in Botswana and surrounding countries including South Africa, Namibia, Zimbabwe and Zambia.

The study will provide an outlook on the potential developments in the power sectors in these countries from a supply/demand point of view, target areas with potential power purchasers, estimated tariff levels, analysis of the political, legal and regulatory frameworks for the power sectors in the surrounding SAPP countries and procedures for wheeling power.

Results from the recent seismic survey and core hole drilling are being assessed by SRK Consulting (Australasia) Pty Ltd, Tlou's geological consultants and independent reserve certifiers with the Company expecting to receive an update on this in the near-term.

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