BOTSWANA – Tlou Energy, an Australia-based company engaged in the exploration and evaluation of Coalbed Methane (CBM) natural gas and development of solar power generation, has signed a 10MW Power Purchase Agreement (PPA) with the Botswana Power Corporation (BPC).
Under the terms of the PPA, BPC will purchase up to 10MW of power generated at Tlou’s Lesedi power project, to be sold into the local power grid.
The PPA is for an initial five-year term with the 10MW project being the first phase of Tlou’s planned power project expansion.
Tony Gilby, Managing Director, Tlou said: “Signing of the 10MW PPA is a major step forward for Tlou and builds on the excellent progress made to date. It has taken some time and considerable effort to get to this point as all of those involved would appreciate it. This achievement puts the Company on a firm path towards the development of the Lesedi power project and considerable growth potential. With strong demand for reliable and cleaner power in the region, this 10MW project is expected to be the start of much larger developments by the Company. This is great news for Tlou, our shareholders, and for Botswana. After a long wait, we can now look forward to getting the project up and running.”
The Lesedi is the Company’s most advanced project and is located in Botswana’s Central District. The first phase will be a 10MW power project with electricity to be sold to Botswana Power Corporation. Once in full production, 10MW of generation could provide annual revenue of approximately US$10 million.
Key stages of the development involve the construction and installation of an overhead transmission line and substations to connect Lesedi to the electricity grid; Installation of generation asset; commissioning and testing and Sale of the first power
The Company has agreed to terms with a potential financier for an initial US$10 million package to develop the Lesedi project.
Botswana is currently not meeting power demand from internal generation and is reliant on imported power at an enormous cost.
Without sufficient internally produced power, neighboring countries effectively control Botswana’s energy security and Tlou plans to start with the supply of power to Botswana followed by expansion across southern Africa where demand for new sources of cleaner energy is very strong.
Tlou’s Hydrogen plans are also gathering pace. A prototype hydrogen and solid carbon production unit is being built in Australia by Tlou’s hydrogen partners, Synergen Met Pty Ltd, a leading hydrogen developer applying unique intellectual property in the form of plasma technology to convert methane to hydrogen and solid carbon.
The demand for cleaner sources of power is growing in many jurisdictions and gas prices are rising rapidly.
With Tlou’s established gas reserves and resources, and the ability to develop gas, solar and hydrogen projects, Tlou is ideally positioned to take advantage of the favorable market conditions.