Tlou Energy and the Botswana Power Corporation (BPC) entered into a Power Purchase Agreement (PPA) for a 2-MW pilot coal bed methane (CBM) project in the country. The interim PPA is now undergoing final regulatory formalities.
According to Tlou in its Q1 operational report, the company remains in discussions with potential project finance partners who have been waiting to see the interim PPA in place, which facilitates connection to the power grid and first revenue for the Company. A pathway to revenue generation is key for financiers and once connected to the grid, expansion of the project (and thereby increasing revenue) is seen as a relatively straightforward and largely de-risked process.
Tlou submitted a proposal to Botswana’s Ministry of Mineral Resources Green Technology and Energy Security (MMGE) in 2018 for the development of a 10 MW CBM Gas-to-Power plant. The 10M W proposal is separate to the 2 MW interim PPA. BPC and MMGE continue to assess the 10-MW proposal and will advise the Company in due course.
Tlou also reported that it is advancing its plans for development of solar power. Solar generation can work as a standalone project or in addition to the planned gas fired generation. Both solar and gas can be used together to provide reliable base load power, with solar generation during daylight hours and gas fired power used when solar is unavailable. This approach would further reduce carbon dioxide emissions compared to Botswana’s existing coal and diesel fired generation.
The company has engaged with potential suppliers and consultants to prepare the design of the solar project and will provide further details to the market in the near term.