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Development of AFR power station underway

Development of AFR power station underway
February 19
13:51 2018


 The Botswana Stock Exchange-listed Independent Power Producer, African Energy Resources (AFR) has indicated that the development of its envisaged power station in Sese is underway.

The management of the company recently told shareholders that AFR remains bullish on the integrated coal and power project and will this year continue with preparations for the construction of the 500MW power plant which is expected to provide power to the local market and export electricity to countries in Southern Africa.

AFR Managing Director (MD), David Tabeart has indicated that in its bid to prepare for the construction of the plant which could start production in 2020, the company will during the first quarter of 2018 commence relocating residents in the project area.

He indicated that the company has submitted an application for electricity generation and export license which is expected to pave way for the construction of the power plant. “A fully detailed application for an Electricity Generation and Export License has been submitted to the Botswana Energy Regulatory Authority (BERA). Follow up meetings have been held with BERA, with more expected in the next quarter,” said Tabeart.

He stated that AFR has requested to use the Botswana Power Corporation for transmission of power supply from the envisaged Sese Power Station. “An application for a Transmission Connection and Use of System agreement has been made to the Botswana Power Corporation. Discussions on the transmission and wheeling of power from Botswana through Zimbabwe and into Zambia have been held with the Corporation and the Southern African Power Pool.”

Tabeart added that the approved 300MW Environmental and Social Impact Assessment for the Sese Integrated Power Project has been updated for a larger project to include up to 500MW of power generation and the minor increase in volumes of coal mining, processing and airborne emissions and further stated that the updated Environmental Impact Assessment will be submitted to the Department of Environmental Affairs in the next quarter. According to estimations by AFR, the coal in Sese is enough to host 8x300MW projects over 25 years.

AFR has given assurance that the Sese project, which has been partly funded by First Quantum Minerals (FQM), has enough funding for pre-construction activities and construction of the power station. According to African Energy’s recent financial statements, the company cash reserves amount to US$4.14 million (just over P40 million) and investments in listed companies of AU$1.17million.

“The project will continue to receive funding support from the Australian mining firm, First Quantum Minerals, which has so far invested over P100 million on the power project,” said AFR. The latter’s financial statements show that FQM spent A$0.48M in the project during the fourth quarter of 2017 and has now spent A$6.0M in addition to the initial A$8M investment. FQM have agreed to invest a further A$4.75 million in the Sese project, according to AFR.

The company has also expressed optimism on the market for power supply, saying demand for power in Sub Saharan Africa is expected to increase significantly over the years. According to recent figures from the company, energy demand in the region is expected to increase from the 423 terawatt per annum recorded in 2010 to 1,570 terawatt per annum in 2050.

“The forecast growth in power demand is linked to the population growth and rising living standards. Population in Sub-Sahara is anticipated to have doubled-up by 2050, with energy consumption also expected to increase proportionally. Although Sub Saharan Africa currently consumes less electricity than Brazil, by 2040 its demand will reach a level equal to 2010 consumption in Latin America and India combined,” said the company.

AFR has indicated that its energy projects in this country, including the envisaged Sese power plant are in a better position to meet the expected increase in demand for power in some regions in Sub Saharan Africa. “There is well developed regional interconnected transmission grid that allows wheeling of power throughout the region via SAPP (Southern Africa Power Pool),” said the company.

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