Lesedi Power Project finance discussions are at an advanced stage with a very reputable Botswana-based entity. According to Tlou Energy, due to confidentiality they are unable to reveal the entity concerned at this time. However, they can confirm that their investment committee and board have discussed the project financing and are favourably disposed to Tlou’s proposal. They are now proceeding with a third-party technical review of the project as part of their due diligence process. Once this report is assessed an investment decision can be made.
The Company is seeking project finance to build infrastructure to connect the Lesedi power project to the existing electricity grid in Botswana. This infrastructure includes transmission lines, electrical substations as well as the installation of gas and solar generation assets.
Lesedi power project
The Lesedi power project is proposed to be developed in two phases. Phase One involves transmission line construction, substations, grid connection, electricity generators and potentially the drilling of additional gas wells. The 100km 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 US $10m which can be staged if necessary or prudent to do so.
Phase Two funding is for the expansion of electricity generation up to 10MW. This will involve drilling gas wells and the purchase of additional electricity generation assets. The funding required for Phase Two is US $20m. Upon successful completion of Phase One and Two, the Company plans to expand the project beyond 10MW.
During the quarter, the Company successfully raised gross proceeds of US $3.6m pursuant to the placing of 75,000,000 new shares at an issue price of 3.5 pence per share. The funds raised are planned to go towards commencement of transmission line construction. While this work proceeds, Tlou will also continue its negotiations with other financiers for further development of the Lesedi project.