The Company is currently seeking funding for development of the Lesedi power project proposed to be developed in two phases.
Phase one involves transmission line construction, transformers, grid connection, electricity generators and potentially the drilling of additional gas wells. The ~100 Km transmission line will run from the Lesedi project to the town of Serowe where it will connect to the existing power grid. Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is ~USD $10m.
Phase two funding is for the expansion of electricity generation up to 10MW. This will involve drilling additional gas wells and the purchase of additional electricity generators. Funding required for phase two is ~USD $20m.
Upon successful completion of phase one and two, the Company plans to expand the project beyond 10MW. This expansion is expected to be completed using project revenues and debt.
Current funding discussions are mainly related to phase one (USD $10m) and have been progressing well. The Company is in discussion with a number of groups, some more advanced than others. These include institutions with a focus on infrastructure development within Botswana and cleaner energy groups looking to see a move away from traditional coal fired generation.
Discussions with Botswana Development Corporation (BDC) have been ongoing for several months. The Company understands that BDC is seeking internal investment approval and the Company continues to work with BDC to successfully conclude a funding proposal that fits within BDC’s investment parameters.
In addition, the Company has recently received an indicative term sheet for transmission line and transformer funding from a new potential financier. The Company will assess this offer alongside other potential financiers to evaluate the best possible option and funding partner going forward.
Meanwhile the Honourable Minister Lefoko Moagi, Minister of Mineral Resources Green Technology and Energy Security (MMGE) and his team visited the Lesedi project. Honourable Minister Moagi has been a long-term supporter of Tlou’s project and again reiterated his support during his visit.