Tlou Seeks Funding for Botswana CBM Project
Southern Africa-focused Tlou Energy is seeking funding for the development of the Lesedi gas to power project in Botswana, the Sydney-listed company said on October 27 in a statement. The project is to be developed in two phases costing $30mn in investment.
The first phase will involve the construction of transmission lines, transformers, a grid connection, electricity generators and potentially the drilling of additional gas wells, the company said. The 100-km transmission line will run from the Lesedi coalbed methane (CBM) project to the town of Serowe, where it will connect to the existing power grid. The initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is $10mn, Tlou said.
Phase two funding is for the expansion of electricity generation up to 10MW. This will involve drilling additional gas wells and the purchase of additional electricity generators. It will require $20mn in funding.
Upon successful completion of both the phases, Tlou said it plans to expand the project beyond 10MW. This expansion is expected to be completed using project revenues and debt, it added.
“Current funding discussions are mainly related to phase one ($10mn) and have been progressing well. The company is in discussion with a number of groups, some more advanced than others. These include institutions with a focus on infrastructure development within Botswana and cleaner energy groups looking to see a move away from traditional coal-fired generation,” it said.
Tlou has been in talks with Botswana Development Corporation (BDC) for several months. The company said that BDC is seeking internal investment approval for a funding proposal.
In addition, Tlou has recently received an indicative term sheet for transmission line and transformer funding from a new potential financier. "The company will assess this offer alongside other potential financiers to evaluate the best possible option and funding partner going forward," it said.
Tlou has development rights to 8,300 km2 of acreage in Botswana which it estimates could contain 90.6bn m3 of gas trapped in coalbeds. The company hopes to pioneer the development of the country's CBM resources as a power source.