AMN - BOTSWANA: Cross-border power production program

The South African Minister of Energy has gazetted a determination setting out terms for the coal baseload cross‐border Independent Power Producer (IPP) procurement program.

In summary:

- 3750 MW to be generated from coal shall be procured through one or more IPP procurement programs from cross border projects. This is an increase from the initial 2500 MW allocation proposed in December 2014

- Allows for Department of Energy to start direct negotiation with one or more project developers in addition to a tendering process

- Procurement programs shall target connection to the grid for the new generation capacity as soon as reasonably possible.

African Energy’s 100% owned Mmamabula West and Mmamantswe projects are being developed for submission into the cross border IPP program.

At Mmamantswe, African Energy has entered an agreement where TM Consulting (TMC) will acquire the project for $20 million, subject to achieving certain milestones, principally the financial close of a 600 MW integrated power project. TM Consulting is funding all development costs on the project.

In February, African Energy signed a non‐binding term sheet with an experienced South African developer, to jointly develop the Mmamabula West project into an integrated coal mine and 600 MW thermal power station for the supply of power in the southern African market.

www.africanenergyresources.com