Botswana CBM-Plant Setback for Tlou

Botswana coalbed methane (CBM) developer Tlou Energy has suffered a setback with its strategy, but says it may yet develop an export-based power project instead.

The Botswana government had asked a Request for Proposal (RFP) for development of up to 100 MW of CBM-fuelled power plants in the country to be retendered, said Tlou February 12.  It said a decision to cancel the original RFP and re-tender had been approved by the Botswana’s Public Procurement and Assets Disposal Board (PPADB).

According to the latter’s statement, Tlou and a second bidder Sekaname were asked to re-tender; the relevant ministry was due to debrief both companies today, February 14.

Tlou said it would weigh its options before deciding whether to re-tender, adding that it continued to pursue other potential options for the sale of Tlou's gas or power in the southern African region.

“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. [Tlou] 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,” Australia and AIM-listed Tlou added.

Tlou generated the first power from Botswanan CBM in July 2017.  The process of submitting its RFP took several months last year and so the response from the government is evidently disappointing for the company. To reduce the initial capital requirement, Tlou's September 2017 submission outlined how the project could be developed in stages starting with an initial development of 2 MW then 10 MW, increasing further once power is being supplied to the grid and a revenue stream has been established.