Jindal Energy Botswana engaged in a 300MW Power Purchase Agreement
Move aimed to develop coal resources and grid capacity augment power deficits
Botswana Power Corporation(BPC) has signed a Power Purchase Agreement (PPA) deal with Independent Power Producer(IPP), Jindal Energy Botswana, for 300MW of electricity for a period of 30 years.
As per the agreement, Jindal Energy Botswana will design, construct, finance, maintain, own and run the 300MW thermal power station which is expected to deliver the first electricity into the national grid during the first quarter of 2028.
Set to enhance the security of power supply locally, the Jindal power station together with Morupule B are set to produce a combined output of 820MW by 2028 to fulfill the projected national demand of 800MW of power.
The agreement comes at a time when the whole of Southern African region is facing power supply challenges and is considered a giant step towards security of electricity supply and a sustainable future.
“This is the first base load PPA in the country and will become a pivotal addition to our energy mix as we add more renewable energy sources. This will undoubtedly enhance security of supply which is currently hinged on the performance of our Morupule B power station. This PPA signifies BPC’s commitment towards successful implementation of the integrated resource plan which aims to make Botswana a net exporter of power with optimal energy mix consisting of fossils and renewables,” explained BPC Chief executive Officer David Kgoboko, further emphasizing that they have fully embraced the government reforms in the electricity supply industry which includes the paradigm shift of purchasing power from IPPs.
Jindal Energy Botswana beat two energy companies, Minergy Limited and Sese Power to win a bid to build a 300 Megawatt coal power generation station as government announced in November last year.
However, the power station goes hand in hand with the coal mine project which is set to supply the plant with coal. Jindal holds mining license for about 3 billion tonnes of coal in the East Mmamabula Coal Fields with plans to carry out initial mining of 4.5 million tonnes of coal per annum.
“This kick-starts the complete process of opening of mine construction and power plant and all pre-activities such as connection of water, electricity, roads and housing. As an integrated project including other supporting infrastructure, we are looking at costs of P13-14 billion but considering an up scaling to add another 300MW that can go as far as P25 billion in the seven year period. In terms of revenue, for these huge projects your don’t get return on investment in a short period of time because these are high capital intensive projects, so a lot of debt is taken. So profits are expected in 15 years time, that’s why you keep the 30 year period,” said Jindal Energy Botswana Country Manager and Project Director- Neeraj Saxena in an interview, further noting that the aim is to start construction activities in two to three months period.
“The objective of the project is to assist Botswana in developing local coal resources and grid capacity thereby enabling the country to be self sufficient in electricity supply while ensuring meaningful local citizen participation,” said Minister of Minerals and Energy Lefoko Moagi.
Botswana has struggled with power supplies, therefore has over the years depended on power imports from Eskom, neighbouring countries and South African Power Pool (SAPP). When Morupule B power station was commissioned in 2012, the expectation was that it would augment the existing 132MW Morupule A coal fired power station, however construction deficits which led to the plant failing to operate at optimal level forced for continued power imports which come at high cost.
Already, BPC has a 10MW PPA with Tlou Energy which is a coal bed methane powered electricity generation plant based in Nyamakatse Ranch, 100km West of Serowe.