Tlou Energy’s losses mount
With demands for capital to fund the Lesedi Power Project mounting, Tlou Energy recorded losses just south of P30 million according to the company’s recently released half-year report for the period ending December 2022.
This represents quite a jump from the P16.7 million the Australian enterprise lost between July and December 2021.
However, as Voice Money reported recently, there is light in sight for the Nyamakatse Ranch-based project, which aims to use coal bed methane gas to produce electricity for the national grid.
If all goes to plan, construction is expected to be completed by July – exactly a year after work first began.
Tlou, whose footprint in Botswana dates back to 2009, has been hard at work constructing a 100km 66kv transmission line, while a sub-station, field processing facility and generation were initiated in the first quarter of 2023, all bankrolled by the company and its shareholders.
Once up and running, which it is hoped will happen before the end of the year, Tlou are expected to quickly recoup their money, with the power plant anticipated to generate annual revenue of around P100 million.
As well as the Lesedi Project, Tlou Energy’s also have solar-power and hydrogen schemes, which are still in the exploration, evaluation and pre-development stage.
As per company’s report, there will be a need to raise additional debt or equity funds to support the ongoing operations and implement its planned activities.
“This includes but is not limited to funding to complete the infrastructure necessary to connect to the power grid and generate electricity at the Lesedi project and funds to facilitate drilling of additional gas wells to deliver sufficient gas for development of the proposed 10MW power project. There can be no assurance that such funding will be available when required or on satisfactory terms or at all. Inability to find sufficient funds my result in the delay or abandonment of certain activities which would likely have an impact on the company’s progress,” warned Chief Executive Officer (CEO) and Managing Director, Anthony Gilby in his report.
As it stands, the 100km transmission line which will link the Lesedi Project and the national grid in Serowe was at 50 percent progress by February. Together with a sub-station at the end of the transmission line both activities are expected to conclude in quarter three of 2023 paving the way for sale of 10MW electricity to Botswana Power Corporation (BPC).
The transmission line has a construction cost of P60 million while sub-stations are at approximately P42 million. With regards to the line, P12.5 million had been utilized as of December, while for sub-stations no costs were reported yet.
“The company actively manages its capital requirements and maintains close relationships with potential investors. As such it does continue to explore sources of both equity and debt capital,” reported Gilby.
Located on approximately 8, 000 square kilometers of land, Tlou Energy’s other projects include Mamba and Boomslang. While no ground operations have been carried out at Boomslang, Mamba is currently in the exploration and evaluation phase with the next stage of operations set to be the core hole drilling to assess coal qualities in different areas.
Though located adjacent to Lesedi, Mamba project is set to be developed into a separate project in the event of successful drilling results.
