Tlou Energy Limited, the company focused on developing Gas-to-Power projects in Botswana and southern Africa through the development of coal bed methane (‘CBM’) natural gas, met with the Ministry of Mineral Resources Green Technology and Energy Security (‘the Ministry’) for an update on the cancellation of the Request for Proposal (‘RFP’) for development of up to 100MW of CBM fuelled power plants in Botswana and the planned re-tender of the RFP to the original bidding companies, including Tlou.
The RFP was issued in early 2017 and Tlou submitted a detailed response to the Ministry in September 2017. Tlou’s submission outlined a staged development commencing with up to 10MW of generation as well as outlining project feasibility, proposed field development, installation of power generation facilities and supply of power into the grid in Botswana.
The Company received correspondence this week that the tender has been cancelled and met with the Ministry to understand why the original tender was cancelled and how a proposed re-tender would be conducted. This was a constructive discussion with engagement from the Ministry as to how best to address their concerns with the original Tlou tender.
The Ministry outlined that neither of the bids received had met their compliance requirements and detailed the areas where bids were non-compliant. The non-compliant areas were discussed, and it was clear that most of them could not be complied with, as the requirements could only be met by a party that was already in commercial operation.
Following the meeting, the Company believes that the Ministry is amenable to amending the tender document as required. The Company will write to the Ministry this week to respond to all compliance matters raised. The Company will also suggest that the Ministry consider establishing a separate process for a smaller pilot project without the necessity for a long tender process. Once this pilot project is successfully operating, it could then lead to a re-tender in line with the Ministry’s current plan.
The Company is confident that a favourable outcome can be achieved due to the good working relationship with the Ministry and the eagerness on both sides to get the CBM industry up and running in Botswana.
Alongside this process, the Company will continue its efforts of connecting to the Botswana power grid and securing other off-takers regionally, who can be supplied via the South African Power Pool.
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