Tlou Energy makes decisive first step on the road to constructing its Botswana gas-to-power project

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Tlou Energy PLC (LON:TLOU, ASX:TOU, BSE:TLOU) has passed a major landmark in the development of the Lesedi gas-to-power project in Botswana by awarding contracts for the transmission line and substation.

The former has gone to Zismo Engineering, a local company, while the latter will be built by South Africa’s OptiPower.

The update comes after the company raised £2.6mln from shareholders to help fund construction. The work also starts the countdown to the first sales of electricity.

Connection to the grid is a crucial part of the overall Lesedi project and requires the creation of a 100km, 66kV line suspended from wooden poles connecting substations at Lesedi and Serowe.

“The proposed transmission line is the key to unlocking our independently certified gas reserves and contingent resources as well as our solar potential,” said managing director, Tony Gilby.

“The local and broader market is significantly short on sources of cleaner energy and Tlou’s projects aim to be a significant supplier over time.

“Our objective remains on track to start production with a measured approach in order to minimise risk and cost of capital. Once the initial gas and solar production is up and running, modular and low risk expansion is the objective.”

The team has secured a mining licence for the area, flowed coal bed methane for the planned gas-to-energy operation and received environmental approval.

The plan is to develop the site in stages starting at 2MW of output, then moving to 10MW. The costs are respectively US$10mln and US$20mln.

Tlou is in talks with project financing groups.

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