Tlou Energy, Botswana Power Corporation Execute Pilot Power Purchase Agreement

A pilot Power Purchase Agreement (PPA) has been fully executed between Tlou Energy and Botswana Power Corporation (BPC) for the first 2MW of power from the Lesedi project. A grid connection agreement has also been signed which enables the injection of power into the BPC grid. These are key agreements that will facilitate development of the power project and the sale of first power.

In addition, Botswana’s Ministry of Mineral Resources Green Technology and Energy Security (‘MMGE’) has provided confirmation that negotiations on a larger PPA are due to commence in February.

Tlou’s Managing Director, Mr Tony Gilby commented:

‘It is great to see that Botswana is open for business and the Government is motivated to get the gas industry up and running. Tlou plans to start development of the Lesedi project as soon as possible and confirmation of the Governments enthusiasm to provide the necessary support to ensure commercial development of CBM is very well received.

In addition, we have also recommenced negotiations with Botswana based project financiers this month as we aim to close a deal for funding as soon as possible.

After what was an extremely challenging year the Company is already making progress in 2021 and anticipate further advancement on all fronts in the coming term. We look forward to updating the market with further developments in due course.’

Government support

The Company has received written confirmation from MMGE of the ‘intention of MMGE to fast track the development of Coal Bed Methane (CBM) in Botswana.’ MMGE also stated that it is ‘happy to provide the necessary support to ensure commercial development of CBM.’

In relation to the current tender to implement up to 100MW of CBM fired power plants (as outlined further below), MMGE has stated that negotiations with preferred bidders are due to commence in February 2021. The letter also acknowledged that the ‘Government is fully committed to seeing this project coming to fruition, as it will promote the gas industry, contribute toward import substitution, as well as to improve the livelihood of Batswana.’

The Company welcomes this update and looks forward to negotiation and finalisation of the tender process in the near term.

100MW Tender

In 2018, MMGE issued a Request for Proposal for Development of up to 100 MW of CBM fueled power plants in Botswana (‘Tender’). The Company submitted a comprehensive response to the Tender including a plan to develop the project in stages, as well as outlining project feasibility, proposed field development, installation of power generation facilities and supply of power into the grid in Botswana. Upon successful completion of the initial project, the Company would look to expand.