On Monday, African Energy announced that its two 100% owned Mmamabula West and Mmamantswe projects in Botswana are being developed for submission into the South African department of energy’s coal Independent Power Producer (IPP) procurement programme.

African Energy preps for IPP programme

On 20 April 2016, the South African Minister of Energy, Tina Joemat-Pettersson, gazetted a determination setting out terms for the coal base-load cross border IPP programme.

In summary the determination stated:

  • 3,750MW to be generated from coal shall be procured through one or more IPP procurement programmes from cross border projects. This is an increase from the initial 2,500MW allocation proposed in December 2014;
  • Allows for department of energy to commence direct negotiation with one or more project developers in addition to a tendering process;
  • Procurement programmes shall target connection to the grid for the new generation capacity as soon as reasonably possible.

Project funding

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 600MW integrated power project.

[quote]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 600MW thermal power station for the supply of power in the southern African market.