Friday, 12 May 2017 14:58

Botswana IPPs target export market

Independent Power Producers (IPPs) in the country are eying to export power generated from its vast coal and gas resources to neighbours South Africa and Zambia, an official has said.
Botswana Chamber of Mines (BCM) Chief Executive Officer (CEO) Charles Siwawa said several companies in the country have secured power licences while others are in the process. Once fully operational the companies intend to export the power across borders.

“We have these IPPs that are going to produce power from the northern Botswana and export it to Zambia. The government of Botswana is also in negotiations with South Africa, through various departments, to actually export significant amount of power from Botswana amounting to 3700 megawatts,” Siwawa told the World Bank’s Botswana Mining Investment and Governance Review report meeting last week in Gaborone.

He said the local companies have been participating greatly in trying to tap into that energy market. Siwawa said there are also discussions and plans to fully utilise the country’s coal resources to generate fuel. He said there will be other downstream industries such as the fertiliser industries that could emerge in this country once the coal resource is explored.

“In terms of quality, our coal is comparable with the biggest coal producing countries like South Africa and Australia,” stated Siwawa.
Botswana has the second largest coal resource in the continent after South Africa amounting to200 billion tonnes and none has been commercially exported outside the continent. Siwawa said Botswana is set to utilise its gas reserves that have proved commercially viable.

Siwawa said the mining sector in the country offers great potential to investors both foreign and local. He said there are several financial institutions that are ready to support the development of the mineral sector in Botswana.
The CEO however pointed out that the performance of the mining sector in the country is rather lukewarm due to the low commodity prices across the globe.
Siwawa was optimistic that in future the price will pick.

Published in Business

Botswana Guardian can safely reveal that the unnamed preferred bidder identified by Botswana Government to develop an additional 300MW power supply by extending Morupule B, is the Japanese multinational diversified trading and investment conglomerate, Marubeni Corporation.

Advocate Sadique Kebonang, the Minister of Mineral Resources, Green Technology and Energy Security recently told Parliament that government was in the process of procuring Independent Power Producers (IPPs) for the development of an additional 300 MW by extending Morupule B with units 5 & 6, each with capacity of 150 Megawatts (MW).However, he did not name the preferred bidder save to say that the procurement process was at the stage of “financial closure,” which he said was expected to be concluded before the end of this year. In fact, Botswana Guardian can this week confirm that Cabinet signed the contract for Units 5 & 6 this week Tuesday amidst opposition from certain ministers that have vested interests as well as opposition from environmentalists.

Marubeni Corporation was founded in 1858 and its focus in Africa include power and other infrastructure projects, as well as projects aligned to industrial diversification imperatives of the region as well as initiatives catering to domestic demand in the commodity field. Marubeni’s association with Morupule B came to light late last month during a joint investment mission undertaken by Embassy of Japan in Botswana and Botswana Investment and Trade Centre (BITC) to South Africa.

The mission engaged the 62-member Japanese Chamber of Commerce and Industries at the offices of Japan External Trade Organisation (JETRO) on the 4th Floor, West Tower along Nelson Mandela Square in Sandton, Johannesburg.It was here that Chairman of the Chamber, who also doubles as Marubeni Corporation’s Regional Chief Operations Officer (COO) for Africa and General Manager of the Johannesburg Branch, Takashi Yao, confirmed his corporation’s engagement in Botswana.

He said it was true they were preparing to come to Morupule B as Independent Power Producers engaged by Botswana government. He expressed sincere hope that the deal would mark the beginning of a long partnership between Japanese companies and Botswana, a country, he said was unique for its high economic growth trajectory and political stability.  Addressing the Japanese investors earlier on, BITC Chief Executive Letsebe Sejoe had said that the commissioning of the two electrical power generation stations was “quite advanced” with discussions ongoing between the two parties. “Just one or two final details need to be agreed and as I understand, it’s just the conclusion of the IPP and we will be able to commission that plant.”It’s expected that commissioning will come on line within 42 months.

Asked by Kaentaro Yoshikawa, an Earth Observation Adviser at South African National Space Agency (SANSA) Earth Observation why Botswana does not rely more on Japan’s expertise for power generation, Sejoe responded;“This is why we are here; we want to talk about that,” he said, adding that lessons learnt in the past have compelled them for the first time ever in their relationship, to gravitate closer to Japan. “Botswana is reaching out more and more to Japan and we will continue to do that because the relationship has to be a strong win-win for both parties, and we think maybe with Japan we will win.”Marubeni Corporation has 132 offices in the world including 12 in Africa.

Its activities include power projects, plants, infrastructure, logistics, finance, industrial machinery to real estate development and construction. The corporation has always been on BITC’s radar. Reitumetse Aphiri, BITC Executive Director for Investment Promotion has been courting this multinational since her days at the defunct Botswana Export Development and Investment Agency (BEDIA).She told Botswana Guardian during the investment mission to Joburg - in which she had accompanied Sejoe along with SA-based Moshie Ratse, the Executive Director for International Business - that Marubeni Corporation was currently doing an Environmental Impact Assessment (EIA) for Morupule B expansion as well as looking for office space in Gaborone.

Further investigations by this publication turned up information that the signing of the deal was delayed by farm owners in the Morupule area and others that have bought fields and are now demanding prodigious sums in compensation from government.

One interested party who is said to have asked for P25 million in compensation this week declined to comment on the issue because he was conflicted by reason of his employment to Debswana, the company that owns Morupule. The joint investment mission to South Africa was hosted by JETRO Africa Region Executive Director Hiroyuki Nemoto and led by Japan’s Ambassador to Botswana, H.E. Masahiro Onishi and Letsebe Sejoe, BITC’s chief executive. Earlier this year, President and Chief Executive Officer of Marubeni Corporation Fumiya Kokubu attended the sixth Tokyo International Conference on African Development (TICAD 6) in Nairobi, Kenya.

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