BPOPF ups shareholding in Tlou Energy

The Botswana Public Officers Pension Fund (BPOPF) has increased its equity stake in fast-emerging energy developer Tlou Energy to 16.63%, affirming its confidence in the Botswana Stock Exchange-listed company.

The pension fund snapped up about 61.3 million additional shares amounting to 5.65 million Australian dollars (A$) (P50m) under the second round of an offer by Tlou that was initially closed in January. The new shares take BPOPF’s total equity in Tlou to approximately 208.5 million shares. Under the original offer, Tlou had given its shareholders the right to purchase 379.6 million shares, with investors eligible to subscribe for four shares for each 11 they already held. Of the shares offered, applications were made for 32.5 million shares raising A$1.1 million (P9.7 million) by the closing date of January 31.

The second round of the offer saw the BPOPF lead in commitments for the outstanding shares, and together with other investors, Tlou netted a further 6.2 million Australian dollars (P55 million).

Tlou officials further revealed that the capital raised will be invested in the ongoing Lesedi Gas to power project, which is expected to cost an estimated P300 million. Lesedi is a natural gas extraction initiative that seeks to allow the nation to exploit the energy potential in the Coal-Bed Methane (CBM) fields to create greater energy production independence for Botswana. The project is expected to open a new energy ecosystem through CBM resource development.

Tlou Energy has the most advanced CBM project in Botswana with independently certified contingent resources of 3.3 trillion cubic feet at Lesedi, making it the most likely to develop Botswana’s first CBM power project.

The capital round follows an investment of

P50 million last year from BPOPF to fund the construction of phase one of the project. The first phase of the project involved the drilling of six natural gas wells, the construction of the 100km transmission line to Serowe, the construction of substations, grid connections and an electricity generator to produce two megawatts of electricity.

The first electricity generated at the Lesedi project will be sold under a 10MW Power Purchase Agreement already signed with the Botswana Power Corporation. Once in full production, the 10MW of generation could provide annual revenue equivalent to approximately A$10 million (P130.7m).