African Energy Resources, the coal-to-power focused company, confirms its two Botswana-based coal projects are being developed to supply South Africa’s energy needs.

African Energy and its 100% owned Mmamabula West and Mmamantswe projects are being developed for submission into South Africa’s cross border Independent Power Producer (IPP) programme the company confirms.

On 20 April 2016, the South African Minister of Energy gazetted a determination setting out terms for the coal base load cross‐border (IPP) procurement programme. In summary:

  • 3 750 MW need to generated from coal and shall be procured through one or more IPP procurement programmes from cross border projects. This is an increase from the initial 2 500 MW 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.

At Mmamantswe, African Energy has entered an agreement where TM Consulting (TMC) will acquire the project for US$20 million, subject to achieving certain milestones, principally the financial close of a 600 MW integrated power project.

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

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