African Energy, the budding energy developer says it will name its partner as it readies to participate in tenders for the provision of coal fired electricity to the South Africa’s market to cushion the country against its crippling power shortfalls. The announcement is expected in the next few months.
The Botswana Stock Exchange (BSE) listed company is looking to exploit the Mmamantswe Integrated Power Project in Botswana and, buoyed by the fact that the project is only 20km from the border with South Africa, has been previously evaluated by Eskom for integration into the South African grid.
“African Energy has been in discussions with several parties regarding execution of a formal agreement with a project developer/consortium in order for the Mmamantswe project to participate in the South African IPP tender process,” the company said in Quarterly Activities Report for period ended March 31.
The company said its selection criteria for the incoming partner include experience in previous tenders in South Africa; relevant technical expertise; local business knowledge, and capacity to sole fund the project through to financial close.
“A final decision on the partner/consortium is expected in the next quarter,” it added.
The South Africa’s Department of Energy has issued a Request for Proposals (RFP) to developers of projects for the first bid window of a 2,500MW coal baseload IPP procurement programme. This specifically includes cross?border projects of up to 600MW size.
South Africa’s Minister of Energy, Tina Joemat-Pettersson admitted recently that in Southern Africa, energy security is both a regional and national issue due to supply and demand locational mismatches, notably in clean energy sources such as hydro.
She then announced ways of mitigating the power shortfall including a suit of sources that include coal—a move that has encouraged local explorers to forge partnerships with South African companies.
“As you may be aware, our Coal Base load IPP Programme will procure 2 500MW (two thousand five hundred megawatts) of electricity from coal fired power stations with Bidders limited to bidding a maximum of six hundred megawatts (600MW) per project,” she said at the time.
“The coal IPP procurement programme is designed to encourage meaningful local participation, and requires 51% South African entity participation. We hope to see more South Africans capitalising on the opportunity created through this programme.”
“Similar to the renewable energy IPP procurement programme, the coal procurement programme will be launched in a number of bid windows, each with a capped allocation and tariff to ensure competitive pricing. The first coal IPP bid window request for proposals was released to the market on 15 December 2014, with Bid responses expected mid-2015. Announcement of the preferred bidders is expected before the end of the year.”
African Energy, together with other coal exploration companies that are awaiting the verdict of Trans Kalahari Railway (TKR) project and are not folding their arms as they are exploring ways to export power to South Africa, which is in a critical need like Botswana.
The company said, in due course, together with its partner(s) will prepare and submit a joint RFP bid for a 600MW coal?fired cross?border power project at Mmamantswe.