Tlou Energy signs PPA with Botswana Power Corporation – takes one more step towards Lesedi gas-to-power project

Tlou Energy has signed this morning a 10 MW Power Purchase Agreement (PPA) with the Botswana Power Corporation (BPC) under which BPC will purchase up to 10 MW of power generated at the company’s Lesedi power project. The PPA is for an initial five-year term and will help Tlou Energy in reaching financial close for Phase 1 of the project, expected to cost $10m.

A Pioneering Project for Botswana’s CBM Industry

Tlou Energy has been working on developing Botswana’s coal-bed methane (CBM) reserves to generate electricity since its incorporation in 2009. Now listed on the AIM, ASX and BSE, the company is focusing on the development of three major project areas in Botswana: Lesedi, Mamba and Boomslang. Lesedi is a lot more advanced and is being developed as a scalable and hybrid solar and CBM gas-to-power project. It has in fact been producing gas for several years now from the Selemo project, though in small quantities. That gas has been used since 2017 to replace diesel within the generators on site.

Lesedi remains an extremely attractive venture because of continued power deficit in Botswana, and continued reliance on coal-based electricity generation and imports. By burning coal and diesel, and importing significant amount of electricity from South Africa, Botswana spends on average $100m every year on securing energy for its industries and households. In contrast, Lesedi is one such project with the ability to offer a cheaper and cleaner solution from a fully local resource base.

Two Phases Requiring $30m

The Lesedi project is now being developed in two phases. Phase one involves the construction of the 100km transmission line from Lesedi to Serowe, which will act as the backbone for any monetisation of electricity produced from CBM at Lesedi. At a cost of $10m, it also involves the installation of transformers and generators, and the establishment of a grid connection. Initial electricity generation in phase one is proposed to be up to 2 MW.

It will then be followed by phase two, at a cost of about $20m, targeting expansion from 2 MW to 10 MW and involving drilling of additional gas wells and the purchase of additional electricity generators. Any further expansion beyond 10 MW will then rely on project revenues and debt from the first two phases.

Botswana’s First Carbon Neutral Baseload Power Project?

In February 2021, Tlou Energy announced it was working towards the goal of being the first carbon neutral baseload power project in Botswana by further advancing land acquisition for carbon sequestration. The company’s plans to combine gas, solar and carbon sequestration at Lesedi make the project a truly unique one for Africa and could result in the supply of carbon neutral power to significant regional power consumers such as the Orapa diamond mine operated by Debswana and located north of Tlou’s gas fields.

Full details on the Lesedi Hybrid CBM and Solar Power Project are available in the “Projects” section within your Hawilti+ research terminal.

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Gabon on the move: what you need to know ahead of the Gabon Oil, Gas & Energy Summit in Libreville this week

Nested in the Gulf of Guinea, Gabon has built itself a reputation of environmental stewardship and sustainable development of its natural resources. The country of less than 2.5m notably hosts Africa’s largest forest elephant population and is covered at 88% by rainforest. Despite being an established offshore hydrocarbons province, Gabon is steadily diversifying away from oil. A public-private partnership with ARISE IIP resulted in the establishment of one of Africa’s most modern and efficient free zones now serving a growing industrial and mining base. The country is in fact one of the world’s top producers of manganese, of which it exported almost 4m tonnes in the first half of the year. Gabon has also successfully industrialised its wood industry to become a recognised exporter of timber: between January and June 2021, the country produced over 1 million m3 of logs.  Gabon’s economy remains fairly diversified compared to that of its African neighbours. Its oil & gas sector’s contribution to the GDP stood at 37.7% in 2020 and represented 33% of government revenues last year. Oil exports also accounted for 70% of total export revenues. Maintaining the pace of investment in the country’s hydrocarbons value-chain remains a priority for the government, especially as it seeks to develop gas-based economies and use oil revenues to invest in sustainable infrastructure and the conservation of its environment. A Focus on Reversing Production Decline Gabon is member of the Organisation of Petroleum Exporting Countries (OPEC) and produced an average of 183,000 barrels of oil per day (bopd) between January and September 2021. This makes it sub-Saharan Africa’s fourth largest producer, behind Nigeria, Angola and Congo-Brazzaville and more or less at par with Ghana. Production has been in decline for several years and has stagnated in the recent past. Gabon launched its 12th Licensing Bid Round before Covid19, which it is just concluding now. The round generated relatively strong interest given market dynamics, and award letters started being issued this month with BW Energy provisionally securing two blocks along with partners Panoro Energy and VAALCO Energy. Source: DGEPF The award of new exploration acreage is much needed in order to encourage seismic acquisition and exploratory drilling and ultimately maintain production in the medium-term. Exploration has so far been a miss this year, with BW Energy’s Hibiscus Extension appraisal well (DHIBM-2) encountering water in the first half of the year, and its Hibiscus North exploration well (DHBNM-1) failing to deliver on pre-drill resource estimate in July. An Independents’ Market Gabon is an independents and national oil companies (NOCs)’ game. Shell Gabon sold all its assets in the country to Assala Energy in November 2017, and Total Gabon sold seven of its non-operated mature fields and operatorship of the Cap Lopez Oil Terminal to Perenco in July 2020. Beyond Assala Energy and Perenco, Gabon’s upstream sector is dominated by Maurel & Prom, VAALCO Energy and BW Energy along with a few NOCs such as Petronas. TotalEnergies remains the only IOC still operating upstream assets in the country. Gabon continues to offer significant opportunities for independents, both onshore and offshore. In February 2021, Panoro Energy acquired Tullow Oil’s 10% working interest in BW Energy’s Dussafu Marin Permit.  A New Strategy to Monetise Domestic Gas Gabon has been working for a few years on a new strategy to monetise gas to generate additional electricity and develop new gas-based industries. The move benefits from significant political will and support and is one of the key pillars of the country’s new three-year plan over the 2021-2023 period, dubbed Plan to Accelerate the Transformation (PAT). Because Perenco represents most of the country’s operated gas production, it will play a major role in the development of Gabon’s domestic gas market. The company completed this year studies and plans for the new 10,000 metric tonnes Batanga LPG plant, where construction is expected to start before the end of the year.  In July 2019, Gabon’s Ministry of Petroleum, Gas and Mines had also signed an agreement giving the Olowi Field to Perenco as its new operator. The field was developed between 2005 and 2018 by Canadian Natural Resources and is now to be redeveloped under an integrated gas project. Source: DGEPF Finally, an expanding gas industry will benefit the power sector. Gabon already runs several gas-to-power facilities and in September 2021, the Gabon Power Company (GPC) signed a landmark Concession Agreement with Wärtsilä for the development, supply, construction, operation, and maintenance of a new 120 MW gas-to-power project in Owendo, next to the capital city of Libreville. A Diversifying Energy Basket Beyond gas, Gabon is also expanding its energy sector with the development of its solar and water resources. Several hydropower plants are currently being developed, When it comes to hydroelectricity, Meridiam and the Gabon Power Company successfully reached financial close on the 35 MW Kinguélé Aval in July this year. Additional facilities include the 15 MW Dibwangui hydropower plant and the 73 MW Ngoulmendjim hydropower plants, whose power purchase agreements (PPA) were signed with Eranove in 2018. Solar energy is also making its entry into the country’s grid with the signing last August of a contract with the Turkish group Desiba Energy for the construction of a 20 MW solar power plant in Doubou, in the province of Ngounié. To find out about investment and business opportunities in Gabon, register for IN-VR’s Gabon Oil, Gas & Energy Summit hybrid conference taking place in Libreville and online between October 20th-22nd. More information at All details on ongoing and future projects across Gabon’s energy sector are available within your Hawilti+ research terminal.

Erdoğan’s African tour: a win-win partnership?

On Sunday, Turkish President Recep Tayyip Erdoğan began his African tour which will take him to Togo, Nigeria and Angola. The visit will marked by trade and security agreements, but it also takes place in a context of tensions involving other powers, in particular France. This will be the 15th time Erdoğan has stepped on African soil as Turkey’s top leader. As President, he has done several short, but regular, journeys which began in 2004 when he was still Prime Minister, and which saw him visit, among others Ethiopia, Tunisia, South Africa, Libya, Somalia, Niger, Senegal and Ghana. By the time he completes his ongoing visit, he will have been to 30 African countries. These relational approaches are far from unilateral, since one notes, for example, that the last 5 presidential visits received by Turkey are African (Angola, Guinea, Sudan, Ethiopia, DRC). Erdoğan also received two weeks ago, Moussa Faki, president of the AU Commission. The discussions focused on issues of infrastructural, economic and human development, mediation, culture, trade, and also humanitarian aspects. In fact, the bilateral trade volume between the two parties has practically increased fourfold in 18 years, going, according to the Turkish Ministry of Commerce, from $ 5.3 bn in 2003 to more than $20 bn today. Turkish investments have also grown in Africa in recent years, going from $ 100m in 2003 to $ 6.5 bn in 2017 (infrastructure, schools, hospitals, etc.). At the same time, the number of Turkish embassies in Africa has increased from 12 to 41. The arrival yesterday of Recep Tayyip Erdoğan precedes the 3rd Turkey-Africa Cooperation Summit which will be held from October 21 to 22 in Istanbul and which will bring together the 54 countries of the continent through official representatives or the private sector. It will be followed on December 17th by the 3rd Turkey-Africa Partnership Summit. The multiplication of African embassies in Anatolia and flights between the two destinations will greatly facilitate things. In the meantime, there is talk of reaching a trade volume of half a billion dollars between Turkey and Angola (currently $ 116 m), along with progressing joint counterterrorism initiatives and executing agreements on hydrocarbons and energy with Nigeria, then economic and defense agreements with Togo.