scramble ensues as prime 600mw tenders loom

Thanks to Apples who posted this article on the AFR thread.

http://www.mmegi.bw/index.php?sid=4&aid=401&dir=2011/December/Friday2

“At least four local energy developers have begun jostling for position following government's announcement that it intends to contract out the provision of 600 megawatts of power between 2015 and 2017, BusinessWeek has established.

With forecasts of a return to power deficits as early as 2014 in spite of input from Morupule B, government has decided to install a further 600mw via two additional 1 x 150mw units at Morupule and another 300mw elsewhere.
Government has said the supply of the additional 600MW will be contracted out to Independent Power Producers (IPP) that have multiplied on the local market since the 2007 legislative changes allowing their existence.
This week, it emerged that the promise of two 300MW tenders has excited all players in the market, from the most advanced to the emerging that are still at exploration stage. While the Morupule-based IPP will be coal-fired, it is also expected the other 300MW will also be energy sourced from coal, which is Botswana's cheapest and most abundant and accessible. Using capital and operating expenditure as the major determinants of contract value, the two tenders could run into billions of pula. A tariff offer for a 300mw coal-fired power station which expired without government agreement last December was based on, among other factors, projected capital expenditure of P5.6 billion.
Securing a power supply tender, particularly with a risk-free client such as government, is critical for any developer and is also part of the requirements for the award of a mining and power licence.
At a coal conference held earlier this week, it emerged that with the Mmamabula Energy Complex and the Mmamantswe coal project respectively, CIC Energy and Aviva are leading the pack for at least one or both of the tenders.
CIC Energy, which has spent nearly P1 billion since 2006 developing the Mmamabula coal-fired power project, will fancy its chances as it previously made a tariff offer to government for a 300mw power station. The Canadian company already has technical and financial plans for a 300mw coal-fired power station, as well as an engineering, procurement and construction contractor on standby.
"We have drilled more holes (to accurately measure the coal resource) than any other company in Botswana and more than all of them combined," CIC Energy president, Greg Kinross, told the conference. "The project is good to go and we have finished everything. The timing for all three components of the Mmamabula Energy Complex is now appropriate as the real numbers are starting to set in. We believe these projects are timely."
Apart from the 300mw project pitched to government last December, CIC Energy also has detailed coal mine and power plant designs for the delivery of 1,200mw . For its part, Aviva is on the ready with similarly detailed plans for a coal mine and associated 1,000mw power station in eastern Botswana, although it is still finalising an environmental impact assessment report. Development of both Mmamabula and Mmamantswe was stalled by South Africa's decision to delay its purchase of coal-based energy from IPPs until 2019.Besides the two major players, junior miners have thrown their hats into the ring. African Energy Resources, with its 2.7 billion tonne Sese coal project, and Hodges Resources, which is targeting the discovery of 800 million tonnes of coal near Morupule, are also in the running.
"We are all trying to secure domestic power agreements, though there are others who have been before us and are far more advanced," said the Managing Director of Hodges Resources, Mark Major. "We have the potential for two billion tonnes of thermal coal, but at the moment, we are focused on resource definition and mining studies."
While CIC Energy, Aviva, African Energy Resources and Hodges Resources are focused on delivering power, other contenders will also be hoping to secure coal supply contracts for local power stations. The race for the 600mw tenders is scheduled to receive a boost from the Coal Roadmap under which government has identified coal export and domestic and export power generation as the most immediate methods of unlocking value from the country's massive coal resources. The roadmap is due to be completed early next year.”