Minergy upbeat as 300MW coal tender nears award
Fast-rising coal producer, Minergy Limited, is hopeful it will grab the 300MW coal-fired power tender floated by government, in which a decision is due from next month, BusinessWeek has learnt.
The 300MW tender is the last coal-fired electricity government will procure, according to the Integrated Resource Plan, which maps out all power sources the public purse will pursue until 2040.
Of the four coal developers shortlisted for the tender, Minergy with its Masama Coal Mine, is the only active coal producer in the group, a fact which CEO Morne du Plessis expects to be a critical factor.
“New entrants don’t have the experience and knowledge to operate in Botswana,” Du Plessis said on Wednesday.
“We have been able to develop at our own pace, but prospective bidders for the power plant will be under pressure to deliver and time to learn will not be available which can delay delivery.
“Minergy has been through the processes and are ready to execute on award.” The other shortlisted firms for the tender include Sese Power, Jindal Africa and Maatla, which are at varying, but largely advanced, stages of development at sites around the country. BusinessWeek has established that Maatla Resources has pulled out of the tender due to challenges in accessing funding. The company’s CEO, Jacques Badenhorst, did not respond to enquiries emailed last week on the matter.
Minerals minister, Lefoko Moagi recently told Parliament the 300MW tender was at the stage of tender clarifications and responses and would be closed in April. Government wants the power station operational by 2026. Du Plessis said the company was optimally positioned to deliver on the tender.
“Minergy has done the hard miles by establishing and operating its mine,” he said.
“By awarding the 300MW coalfired power plant bid to Minergy, all benefits and growth go to the local economy and not channelled offshore. This is therefore a local economic bid.
“Technical expertise is available as we have partnered with strong technical partners.
“Minergy stands ready to supply the Botswana power plant. Our coal has the right specifications, and our resource has a proven life of more than 100 years.”
Scooping the tender would be a major boost for Minergy as it would add a revenue stream to the Masama coal sales. With a resource of 390 million tonnes of coal, Minergy has been ramping its production and sales locally and into South Africa and Namibia.
Financial results released on Wednesday indicate that Minergy’s sales for the six months to December 2021 ticked up 50% when compared to the corresponding period in 2020, while average prices also improved.
According to available tender notes, the winner of the 300MW bid will be expected to build, own, operate and maintain the power plant, which can be located anywhere in Botswana. The winning builder will also have to enter into a Power Purchase Agreement with the Botswana Power Corporation. Analysts have said the pricing of the power coming out of the station will be determined by capital and operating costs, the profit markup charged by the developer and other factors.