Thursday, September 24, 2020

BPC, Eskom to sign agreement tomorrow

Botswana Power Corporation will be signing a memorandum of understandings with Eskom Holdings Limited on Monday on the development of the multi- million pula Mmamabule Coal Fired Power Station.

Representatives of the two organizations in Gaborone will sign the long awaited agreement.
The cross-border power purchase agreement, arising from a proposed 3 600-MW coal-fired station is expected to be constructed some 120 kilometers north of the capital Gaborone, east of the GaboroneÔÇôFrancistown road.

Enterprise division MD, Brian Dames, said that Eskom was pursuing a range of its own generation projects but it had not discounted imports, including those from Botswana.

“The guys in Botswana are working hard and, hopefully, by the end of the year, they can have their pricing ready,” Dames said, adding that Eskom would then compare the Botswana prices with those arising from its own projects. That would lay the basis for a negotiation on a possible power purchase-agreement structure.

Eskom has already approved a R26-billion 2 250-MW base-load coal-fired station, known currently as ‘Project Alpha’, probably for construction in the Lephalale region of Limpopo. The utility has not yet procured a site and is still in tough fuel negotiations with various coal miners. This project, which would involve three 750-MW units, is likely to be expanded to six units, board sanction for which will be sought during the current financial year, which runs until the end of March. In addition, Eskom is advancing studies into a further 4 000-MW coal-fired station, for which board approval was expected to be sort before the end of the year, according to South Africa media reports.

He indicated that, unlike Alpha, Eskom would seek to secure sites well ahead of approvals so as to ensure that all the necessary approvals, including environmental approvals, are in place well ahead of actual construction. At present, a site near its Matimba power station is preferred for Alpha and it has been laid down as such in the tender documents, which have been circulated among possible bidders.

“In my view, all of these are not just options, but need to happen,” Dames said, adding that it is, therefore, in far-reaching coal negotiations with various South African suppliers, including Ingwe, Kumba, Eyesizwe, Sasol and others.

Dames’s comments on the Botswana Mmamabula coalfield and station gel with those made recently by CIC Energy of Canada, which is progressing exploration of the deposit as well as a possible $5-billion power station.

Proposed is a 12-million-ton-a-year coal mine and adjacent 3 600 MW coal-fired power station, with CEO Francois Badenhorst reporting to Mining Weekly recently that the detailed feasibility study for the Mmamabula Energy Project could be finalised by November. Snowden is conducting the resources, geology and mine planning and Black & Veatch the power plant feasibility study. CEO Gregory Kinross says that Mmamabula’s first of six 600-MW generators is planned to begin operations by the first quarter of 2011. The other five units will follow at six-month intervals.

The company has signed a memorandum of understanding with Eskom and power-purchase negotiations are due to start soon and should be finalised by the end of the year.

Agreements between the two governments will be completed “imminently”, Kinross said.

In addition, Eskom transmission MD, Jacob Maroga, had said that the Southern African Development Community had significant potential in terms of coal and hydroelectric power. Harnessing the power of the Congo River alone could provide 40 000 MW.
Work is said to be progressing on the proposed Inga Three project, to which five SADC utilities, under the banner of Westcor, committed two years ago.

Eskom CEO, Thulani Gcabashe, said the company had been set up and registered, the intergovernmental and interutility memoranda had been signed, staff had been appointed and the feasibility studies were under way.

“Once there is an elected government in the Democratic Republic of Congo, the prospect of carrying the project through is that much stronger. So we believe that it will in fact help progress the project faster. But we have not held back. We have been doing work that had been planned,” Gcabashe said. (Sunday Standard/ Mining Weekly).

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