Local commercial banks rose to the challenge by pumping in P 1.2 billion into Morupule expansion project that is aimed at powering the country at the height of the intermittent power cuts that have affected the southern African region.
Three banks, with Stanbic/Standard Bank of South Africa, as the lead arranger, coughed up cash that will be used to expand the colliery mining operations, in line with the additional coal feed required by Botswana Power Corporation (BPC), to operate Morupule B Phase1, 600 mw power station.
Stanbic took a bigger share of the loan facility that was advanced to DebswanaÔÇöthe parent company to Morupule Colliery ÔÇô while Barclays Bank of Botswana and First National Bank of Botswana (Rand Merchant Bank of South Africa) equally took the remaining share.
Debswana confirmed Friday night that the duration of the loan was for nine years, adding that Stanbic was “the largest contributor to the loan of the three banks making up the lending consortium”.
The current P1.2 billion loan facility is the second major commercial banks’ syndicated loan since the construction of the North-South Water Carrier that started to convey water in 2000.
It also signifies confidence in the oldest, and underground mineÔÇöafter BCL. The mine was founded in 1973, initially with the aim of supplying power to BCL mine.
The loan is made up of fixed and variable interest rates, with the variable component linked to the Bank of Botswana Certificate (Bobc’s) rate.
At the time of going to press, Fieldstone Financial Advisory– a division of Fieldstone Financial Management Group in Boston and Forbes quoted outfit ÔÇöthat assisted in the transaction was understood to be working on a detailed statement that will be released during the week.
Morupule mine is by far one of the richest coal resource in Africa and, if mined at the present rate, will take the country 15,000 years to deplete it.
The current Debswana concession covers Morupule and Kgaswe that have resources of 15 billion tonnes of coal.
Further, it has commissioned two studies to look at possible plans of producing liquid fuel ÔÇô such as petrol and other related aspectsÔÇöas it is being done by Sasol in South Africa. The expansion alone will see the mine producing 6000 mw or 3 million tonnes of coal, generating electricity in the initial stage, which will later expand by a further 6000 mw.
At the moment, Botswana is heavily dependent on imports for its power needs and the bulk of it comes from South AfricaÔÇöa country faced with aging mines and power plants.
Botswana has an abundance of coal, measuring 2012 billion tones. And the Morupule ore body stretches as far as MoiyabanaÔÇöover some 60 kilometers from where the mine presently is.
As part of meeting the ISO 14001 to meet the international standards the company has built P 87 million wash plant, which reduces sulpher and ash content of coal by being washed twice.