Botswana Coal ambitions under threat
Botswana is among the five countries that still have coal plants planned despite global momentum for lobbying for renewable energy.
A new report produced by international think tanks E3G, Ember and Global Energy Monitor titled: No New Coal by 2021, shows that the global pipeline for new coal power projects is rapidly shrinking as momentum builds for ‘ No New Coal’ beyond 2021.
Five countries - Botswana, Malawi, Mozambique, South Africa and Zimbabwe - are among a minority group of just 21 countries that have more than one new coal power plant at the planning stage.
According to the report, the five African countries have projects that are seeking financing from China, and now face an uncertain future following China’s recent announcement that it will end support for overseas coal projects.
Currently, there are only four coal power plants in construction on the continent, in South Africa and Zimbabwe, and only three plants have become operational since 2015.
The report also comes as seven governments including Sri Lanka, Chile and Germany announced ‘ No New Coal Power Compact’ at the UNGA on 24th September, inviting more countries to join the commitment ahead of the COP26 climate summit in November.
United Nations Secretary- General, António Guterres has called for ‘ no new coal by 2021’, while COP President Designate, Alok Sharma has called for COP26 in November 2021 to ‘ consign coal to history’.
With China’s recent announcement that it will no longer build coal power projects overseas, following similar commitments earlier this year by Japan and South Korea, the cancellation of the global pipeline of preconstruction coal projects will undoubtedly accelerate. Investors have already started threatening Botswana’s coal resource which is estimated to be over 200 billion tonnes with Shumba Energy announcing intentions to sell its coal projects in the country. “The company intends to appoint specialist advisors to assist the company in developing and implementing an appropriate strategy to monetize its fossil fuel assets and assess their migration into a more appropriate company vehicle, including interalia potentially merging them with other player( s) in the space to add scale and focus,” said Managing Director of Shumba Energy, Mashale Phumaphi. He said the company’s focus in the immediate term going forward will be on delivery of renewable energy projects. However, Phumaphi believes that fossil fueled projects will continue to be necessary for a transitional period of some decades to support Africa’s rapidly increasing base- load energy requirements.
Shumba Energy has been developing renewable energy opportunities for several years to incorporate into the longer- term growth plans of the business. Currently, the company is on rapid advancement of Tati Solar Project, a 100 MW solar project.
Another investor, Kibo Energy has announced intentions to refocus, dispose of coal energy projects and to focus on renewable energy opportunities.
Kibo has been developing three utility scale coal- fueled power projects, located in Tanzania, Botswana, and Mozambique.
Some of the projects threatened by the no new coal lobbyists are the 600 MW Mmamabula West power station that has seen little progress since 2018, and with no source of financing, appears to be shelved, though license for the related coal mine project was extended in 2021, but still has not found a partner.
The Chinese- sponsored 450 MW Sese project is seeking to finalise commercial agreements and financing and its status is unclear, following China’s commitment to end overseas coal finance. Another is the Mmamantswe Coal Project, a 600 MW power plant and mine approved in 2012, has seen no progress since a delay in 2019 and is still seeking an off- taker, suggesting a lack of enthusiasm from Botswana Power Corporation ( BPC).