Tlou to start Lesedi Phase 1, receives EIS approval for Boomslang

26th April 2021 By: Schalk Burger - Creamer Media Senior Contributing Editor

Southern African energy development company Tlou Energy said that, following a recent capital raising, it has the necessary funds in place to start construction on the transmission line for its Lesedi project.

It added that the Botswana Department of Environmental Affairs had approved the environmental-impact statement (EIS) for its Boomslang project, which is adjacent to the Lesedi power project.

"Tlou Energy plans to commence work on the development of the Lesedi project as soon as possible," the company said in a quarterly operational update published on April 26.

Key stages to achieve first revenue include construction of the transmission line to connect Lesedi to the existing power grid, the installation of substations at the Lesedi site and at Serowe to integrate with the grid, the installation of generation assets at Lesedi, commissioning and testing, and the sale of first power, it said.

"During the quarter [ended March 31, Tlou Energy] successfully raised gross proceeds of £2.625-million pursuant to the placing of 75-million new shares at an issue price of 3.5 pence a share. The funds raised are planned to go towards commencement of transmission line construction. While this work proceeds, Tlou will also continue its negotiations with other financiers for further development of the Lesedi project."

The Lesedi project is the company's most advanced project. Tlou plans to develop gas and solar power generation assets at Lesedi.

In addition, it has two large exploration areas designated Mamba and Boomslang.

During the quarter under review, Tlou received correspondence from advisers assisting the government of Botswana in the execution of its coal-bed methane (CBM) programme for the development of up to 100 MW of CBM-fuelled pilot power plants. The aim of this process is to secure a 10 MW power purchase agreement (PPA) between Tlou and the national energy utility Botswana Power Corporation (BPC).

Advisers have confirmed they are reviewing project documents including the draft PPA. Tlou is focused on progressing this to a conclusion as soon as possible.

Further, BPC has issued a tender for the supply and delivery of natural gas to the Orapa 90 MW power plant. The power plant provides power to the Orapa diamond mine, one of the largest diamond mines in the world.

Orapa is currently running on intermittent grid power and emergency diesel generation. Anglo American, which is the owner of the De Beers group and co-owner of Orapa along with the government of Botswana, has publicly stated its objective to move to cleaner fuel sources.

"Gas from Tlou’s nearby discoveries could be ideally suited to assist with meeting their cleaner energy objectives. Tlou will review the tender documentation and subject to meeting the eligibility criteria, plan to submit a response. The tender closes in May," the company said.

Tlou is seeking project finance to build infrastructure to connect the Lesedi power project to the existing electricity grid in Botswana. This infrastructure includes transmission lines, electrical substations, as well as the installation of gas and solar generation assets.

"Project finance discussions are at an advanced stage with a very reputable Botswana-based entity. Owing to confidentiality, Tlou is unable to name the entity concerned at this time. However, we can confirm that their investment committee and board have discussed the project financing and are favourably disposed to Tlou’s proposal.  They are now proceeding with a third-party technical review of the project as part of their due diligence process. Once this report is assessed, an investment decision can be made," it said in the quarterly update.

BOOMSLANG PROJECT
Meanwhile, all proposed project activities for the Boomslang project outlined under the EIS have been authorised, including drilling of core holes and stratigraphy boreholes, conducting seismic and geomagnetic surveys, pilot testing production wells (called pods), monitoring wells and evaporation ponds and installing pumping monitoring, gathering lines and evaluation equipment.

"Tlou believes the Boomslang project can complement the more mature Lesedi and Mamba projects, particularly given the presence of the highly prospective Serowe coal seam. The Lesedi and Mamba projects primarily target the deeper Morupule coal seam.

"EIS approval for exploration of the Boomslang permit represents another key milestone for Tlou. Successful exploration and development of the Boomslang area could facilitate Tlou’s longer-term strategy of expansion beyond the current Lesedi project area," the company said.

Tlou is looking into the potential of using gas and solar to produce green hydrogen. These early-stage plans may lead to a trial project hosted at its field operations in Botswana.