Botswana Power Plant Expansion Plan Stalls over Terms

A planned $800 million expansion of a coal-fired power plant in Botswana by Japan’s Marubeni Corp and South Korea’s Posco Energy has been put on hold due to a disagreement over terms, the energy minister confirmed recently.

Marubeni and Posco Energy were due to start work in January last year on a project to add 300 megawatts to the current 600 megawatt Morupule B plant, which was built by the China National Electric Equipment Corp at a cost of $970 million.

The power station has often broken down, leaving Botswana to rely on diesel generators and imports from South Africa.

Energy Security Minister Sadique Kebonang commented that the Government failed to agree with Marubeni and Posco Energy on a number of issues, notably a proposed $800 million state-backed guarantee to protect the companies’ investments.

“The Power Purchase Agreement has now expired since the project failed to take off within a year from the date of signing as stipulated in the agreement,” Kebonang said.