Tuesday, October 4, 2022

BPOPF amongst Shumba’s private placement shareholders

Botswana Public Officer’s Pension Fund (BPOPF), the largest pension fund in the country has been listed amongst the five substantial shareholders of a post private placement of shares by coal explorer, Shumba Coal.

The junior mining explorer which is quoted in the Botswana Stock Exchange (BSE) and Mauritius Stock Exchange recently announced its intentions to raise at least P27.5 million through private placement, consisting of 19,695,856 shares at a price of P1.40 per share. The private placement represents a 27 percent premium to the weighted average traded price of the Company’s shares on the BSE in the 30 days prior to the placement.

The BSE has reportedly confirmed that the private placement complies with the listing requirements while no specific approval is required from the Mauritius Stock Exchange where the company has a secondary listing. Capital markets data shows that BPOPF is amongst the beneficial shareholders owning in excess of five percent of the issued share capital post the private placement. On top of the beneficiaries is Black Phoenix Limited with a shareholding of 76, 475, 580 or 35.30 percent while BPOPF comes second with a shareholding of 30, 389, 197 (14.03%).

Also notably in the list is BAI Co (Mtius) Ltd, whose shareholding stands at 7.69 percent. The BSE listed company intends to develop one or more 300MW or larger power stations in addition to producing coal for domestic and regional consumption. Having completed the scoping feasibility analysis into transmission teething technicalities, Shumba Coal’s export strategies are at high noon. The feasibility analysis aims to increase the export volume by doubling generation capacity and increasing exports by 100 percent. Regional countries designated to benefit from the electrical power exports include Namibia, South Africa as well as strife-torn and impoverished Zimbabwe.

The majority citizen-owned company intends to join the monetisation bandwagon of energy developers such as African Energy and Jindal to benefit Botswana’s estimated 212 billion tons of coal through exports.

The 300MW SEP power station will feed into the Botswana Power Corporation’s (BPC) 400kV high-voltage transmission grid at Morupule B 400kV sub-station. The Botswana power transmission grid is interconnected via Phokoje substation to South Africa at Matimba and Zimbabwe at Insukamini at 400kV. This is linked to the Southern African Power Pool (SAPP) which was created with the primary aim of providing reliable and economical electricity supply to the consumers of each of the SAPP members, consistent with reasonable utilization of natural resources and effect on the environment. According to current statistics, Shumba Coal’s energy exports, designed to alleviate power shortages in Namibia, South Africa and Zimbabwe, fall well below peak demands of 611 MW, 36, 664 and 2, 029, respectively.

Therefore, the exports will be equivalent to tiny water drops in the ocean of power outages. Results of the study, according to the company show that transmission costs of SEP exports are lowest for South Africa and Zimbabwe markets and higher for export to Namibia. It was also established that there are no expected system constraints to address on the interconnections to South Africa and Zimbabwe that require investments or other interventions.


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