Wednesday, October 20, 2021

Tlou Energy’s CBM fuel plant…one step forward, two backwards

In what is seen as a setback for one of the local companies that are eager to develop a coal bed methane-powered power station, the Ministry of Mineral Resources Green Technology and Energy Security has directed a restart of the process of tendering for a 100Mw natural gas power station.

Atleast two companies, Tlou Energy and Sekaname (Pty) Ltd are expected to re-tender for one of the country’s fewest CBM fuelled power plant.

Sunday Standard has been informed that the two companies were invited to submit bids under a new re-tender process, a decision that observers have described as a setback for Tlou Energy.

It is understood that the decision to cancel the original RFP and re-tender has been approved by the Public Procurement & Assets Disposal Board (PPADB).

This was after the Ministry of Mineral Resources Green Technology and Energy Security reportedly requested for cancellation of the tender for development of a maximum of 100 MW CBM fuelled power plants and re-tender by short listing the same two bidders who had bid for the tender being Tlou Energy Limited and Sekaname (Pty) Ltd.

In response to Sunday standard questionnaire, Public Procurement and Assert Disposal Board (PPADB) Executive Director-Works Elijaah Motshedi said the two companies were initially selected after their participating on Expression of Interested which was issued sometimes in 2016 and were the best amongst other companies. He said the decision to cancel and re-tender was arrived after the Board was not satisfied with the two company’s submission.

 “It was the board decision after the tender was evaluated and they arrived at a conclusion that both companies should re-tender because they have failed to meet the prescribed requirements. The companies were then given another chance to prove themselves,” said Motshedi

He said the two companies were found non-responsive to the tender requirement and were advised to re-tender.

Ministry of Mineral Resources Green Technology and Energy Security, Chief Public Relations Officer, Moreri Moesi confirmed that the debriefing was done this past Wednesday (14th February 2018) in relation to the original submission and the planned re-tender process.

Moesi said the two companies were selected based on the Expression of Interest which was advertised sometimes in 2016 and they were amongst the best companies to bid for the Lesedi Coal Bed Methane Power Plant.

He said further information will be available, and the company will convey the information to the market as soon possible. Should an RFP re-tender be announced as referred to in the PPADB statement, Tlou said it would assess this in detail before making any further decision to participate in the re-tender process or not.

Tlou Energy said whilst it has been awaiting a response from the RFP process, in line with its stated aim of becoming a regional power producer, it has continued to pursue other potential options for the sale of Tlou’s gas or power in the southern African region.

These other opportunities will continue to be developed as a priority. Developing the project, securing off-take agreements with third parties, connecting to the grid and selling or wheeling power regionally is potentially a simpler option which can be better controlled by the company. As Botswana is part of the Southern African Power Pool (SAPP), Tlou is not restricted from connecting to the grid in Botswana and supplying power via wheeling arrangements to other SAPP member states.

According to Tlou Energy, it has already commenced a market study to provide information on the power sectors in Botswana and surrounding countries including South Africa, Namibia, Zimbabwe and Zambia.

The study will provide an outlook on the potential developments in the power sectors in these countries from a supply/demand point of view, target areas with potential power purchasers, estimated tariff levels, analysis of the political, legal and regulatory frameworks for the power sectors in the surrounding SAPP countries and procedures for wheeling power.

Results from the recent seismic survey and core hole drilling are being assessed by SRK Consulting (Australasia) Pty Ltd, Tlou’s geological consultants and independent reserve certifiers with the Company expecting to receive an update on this in the near-term.

Tlou generated the first power from Botswana’s CBM in July 2017.

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