Wednesday, October 21, 2020

Tlou Energy is traversing the road less travelled to power Botswana

The listing of Tlou Energy into the Botswana Stock Exchange (BSE) last week Wednesday officially enlisted the generation of electricity by means of natural gas extraction as one of the alternative ways the country is sourcing electricity. 

“We believe we’re on the verge of creating a new industry for Botswana which will have a multiplier effect on the economy,” said The Company’s Executive Director, Gabaake Gabaake when speaking at the listing. 

Energy demand is projected to increase and given the choice between solar, coal and natural gas as means of electricity generation it appears, at present, that Botswana finds itself at the cusp of leveraging each of the available options in anticipation to meet the growing demand. 

Tlou Energy has chosen the unconventional route of producing power using natural gas. According to the company Tlou is positioned to capitalise on a first mover advantage in the Southern African unconventional gas industry. Gabaake, revealed that Tlou Energy currently has enough gas reserves to generate more than 100MW of power for over 30 years. He indicated that the ongoing gas project is over a small area adding that going forward the company will tap into the enormous gas reserves potential. “We’re putting an extensive and quality roadmap towards the provision of 100MW of power into the Botswana Power Corporation (BPC) grid by 2019,” he said. At the present time the company is producing power on site using gas.

“We have converted one of the 10 licenses that we have into a mining license, we’re actually sitting today with approval to mine the gas,” he said. Natural gas, he said, has 50 percent less carbon than coal which makes it cleaner power than coal fired power. “Environmentally there is a need in Botswana for the development of a relatively clean, low carbon energy source to replace the use of diesel in the production of electricity,” cites the company website. The coal resource in Botswana as revealed by studies is estimated at 212 billion tones.

Government has in recent times been peddling efforts to promote power generation by the private sector through Independent Power Producers (IPPs) whether by coal, gas, solar or any other method. This is especially because it is working towards significantly reducing reliance on imported power which comes at a heavy cost. Tlou Energy in that regard joins other energy development companies such as Shumba Energy (also listed in the BSE), African Energy (Australian listed) and First Quantum Minerals and Minergy Limited (listed in the BSE) currently undertaking electricity generation activities.   

According to information from the company 21,153,845 ordinary fully paid shares will be issued to investment funds managed by African Alliance Botswana Limited, an asset manager based in Botswana. Funds raised from the issue of the new shares amounts to P33 million (approximately £2.4 million or A$4.1 million) at a subscription price of P1.56 (approximately £0.11 or A$0.20). The proceeds of the share subscription together with existing cash will be applied by Tlou to complete the current seismic and core hole appraisal program, commence first phase development drilling at the Lesedi project, fund the costs of the BSE listing and share subscription and for working capital purposes.

 

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