African Energy, the mining and energy development company with assets in Botswana, said on Monday it has submitted a bid together with a South African Black Economic Empowerment (BEE) partner to supply power to Africa’s largest economy, which is failing to meet its growing energy needs.
In an update to the market, the Botswana Stock Exchange (BSE) quoted outfit said it has successfully lodged a proposal to supply 300 MW to the country’s Department of Energy.
“African Energy Resources Ltd (AFR) has prepared and successfully submitted a Request for Registration and Information (RFRI) to the Republic of South Africa’s Department of Energy (RSA) for the development of a 300MW power station and captive coal mine to supply energy to the South African electricity grid,” African Energy revealed.
The move follows South Africa’s decision last year to add close to 11,000MW of new generating capacity to its forward procurement programme
Atleast, 2500 MW has been reserved for base ? load coal ?fired generation, including domestic and imported energy from Independent Power Producers (IPPs). African Energy Resources is a budding IPP, which is also eyeing to supply Botswana Power Corporation (BPC) with electricity.
The project to be done in conjunction with the unnamed BEE partner will be based at African Energy’s advanced Sese Coal Project in Botswana and it will supply power to the Eskom grid. Eskom is the South African state owned power utility which will be an off-take party on behalf of the government.
African Energy is also targeting the power shortfall in Botswana where BPC is struggling to meet the growing demand from expanding economy and failures by Morupule B Power plant.
Botswana has already released a Request for Pre?Qualification (RFPQ) for a 300MW independent power project to be built at the existing Morupule power complex (Brownfield IPP).
The energy market is anticipating that an RFRQ for an additional 300MW power plant to be developed at an alternative site in Botswana will be issued shortly (Greenfield IPP).
“AFR intends to lodge a submission for the Greenfield IPP in conjunction with its project partners, with whom advanced negotiations regarding the terms of such joint development are nearing completion,” the company said.
African Energy said studies indicate that the geometry and low strip?ratio of the Sese Block?C coal resource will result in mining costs towards the bottom of the southern African cost curve.
“This permits the development of power projects with very competitive tariffs for sale to regional utilities and private companies,” it added.
Measured resources defined at Sese Block?C alone contain enough coal to support an estimated 2,400MW of generating capacity for over 25 years, thereby providing substantial expansion opportunities.
African Energy recently concluded the purchase of Mmamantswe coal project from Aviva Corporation.
Sese Coal & Power Project is located 50km to the south of the mining hub of Francistown.