Tlou Energy awards tenders for transmission line and construction of Lesedi project in Botswana
Tenders have been awarded to Zismo Engineering ("Zismo"), for the construction of the overhead lines and to OptiPower for construction of substations at Lesedi and Serowe. The Company looks forward to finalising the contracts with both groups and subsequent commencement of construction.
Zismo is a Botswana based Electrical Engineering, Contracting, Automation and Refurbishment Company. OptiPower is a division of Murray & Roberts Ltd. Based in South Africa, OptiPower's core business includes the construction of substations, power lines and fibre optic networks.
Tlou Energy is focused on delivering cleaner electricity in Botswana and southern Africa using gas and solar power. The Company's first proposed development is the Lesedi Power Project, which includes the construction of a power station and sale of electricity in Botswana. In addition, the Company has two large exploration areas designated Mamba and Boomslang.
The Lesedi project is located approximately 100 Km from the existing electricity grid in Botswana. The first stage of development will be the erection of wooden poles fitted with an overhead 66kV transmission line. Substations will be installed at Lesedi and Serowe. The Lesedi substation will integrate the generation assets with the transmission line and the Serowe substation will tie in with Botswana Power Corporation's existing infrastructure.
The transmission line route has been surveyed and full environmental approval is already in place. The line will predominantly cross flat, arid terrain with the last ~5 Km being through the outskirts of the Serowe township.
The transmission line and substations are vital elements of the first phase of the Lesedi project development. Key stages to achieve first revenue are:
- Construction of the transmission line to connect Lesedi to the existing power grid;
- Installation of substations at the Lesedi site and at Serowe to integrate with the grid;
- Installation of generation assets at Lesedi;
- Commissioning and testing;
- Sale of first power.
The construction of the transmission line is a very significant step forward as it enables Tlou's gas field and solar potential to supply power into a potentially enormous market.
Local and regional power consumption is high, with supply currently unable to meet demand. In 2019, ~28% (1,101 GWh) of Botswana's power was imported at a cost of ~P861m (~ $75 million). Furthermore, demand both within Botswana and in neighbouring countries is steadily growing. Tlou has the potential to access the electricity market outside of Botswana via the Southern African Power Pool once connected to the Botswana grid.
Tlou's independently certified gas reserves and contingent resources, if used to generate electricity, could alleviate some of this demand. Tlou's 3C Contingent Resources of ~3 trillion cubic feet (TCF) have the potential to provide hundreds of MW's of power, subject to gas recovery rates.
Tony Gilby, Managing Director, Tlou: "We are delighted with the response to our tender and look forward to working with our new local contractor Zismo and OptiPower, to connect our Lesedi power project to the grid at Serowe. The proposed transmission line is the key to unlocking our independently certified gas reserves and contingent resources as well as our solar potential. The local and broader market is significantly short on sources of cleaner energy and Tlou's projects aim to be a significant supplier over time. Our objective remains on track to start production with a measured approach in order to minimise risk and cost of capital. Once the initial gas and solar production is up and running, modular and low risk expansion is the objective. The as-yet un-tapped gas that the Company has proven to exist within its 100% owned ~9,000 square kilometres represents an enormous cleaner energy resource for the region. When combined with Tlou's solar generation plans, which are predicated on producing solar power from a region with known high solar incidence, this should continue to provide significant upside for shareholders and Botswana alike. With funds in place to commence construction, we intend to start work on the ground as soon as possible and thereby begin to unlock Tlou's potential."