Tlou Energy has announced an update on funding for the construction of the Lesedi power project to provide cleaner electricity in Botswana and Southern Africa using gas and solar power.
Tlou Energy has worked with a variety of parties to obtain support for the Lesedi project. The company is seeking funding for the project to construct a transmission line from the Lesedi power project to the current electricity grid as well as electrical substations, gas and solar power generation assets.
The most advanced project finance discussions are currently being held with a rather respectable Botswana-based entity. Due to confidentiality, the corporation cannot name the person involved at this time.
However, we can confirm that their investment committee and board have discussed and are in favor of Tlou's plan. They are in the process of obtaining a third party technical analysis of the project as part of their due diligence process. If this study has been reviewed, an investment decision can be taken.
It is proposed that the Lesedi project be built in two phases. Phase one includes the installation of transmission lines, substations, grid connections, power generators and, possibly, the drilling of additional gas wells. The approximately 100 km transmission line will extend from the Lesedi project to the town of Serowe, where it will be connected to the current power grid. Initial generation of up to 2MW of electricity is proposed. Funding needed for phase one is ~USD $10m, which can be staged if appropriate or wise to do so.
The funding phase two is for the extension of electricity production up to 10MW. This will include the exploration of gas wells and the acquisition of additional power generation properties. Funding expected for phase two is approximately US$20 million. Upon effective completion of phases one and two, the Company expects to extend the project beyond 10MW.
As predicted, the company received correspondence from advisers to assist the Government of Botswana in the implementation of its Coal Bed Methane (CBM) program for the construction of up to 100MW of CBM fuelled pilot power plants.