Sese Integrated Power Project
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Sese Integrated Power Project is a shelved power station in Francistown, North East, Botswana. It is also known as Sese Joint Venture Project.
Location
Table 1: Project-level location details
| Plant name | Location | Coordinates (WGS 84) |
|---|---|---|
| Sese Integrated Power Project | Francistown, North East, Botswana | -21.378798, 27.440522 (approximate) |
The map below shows the approximate location of the power station.
Project Details
Table 2: Unit-level details
| Unit name | Status | Fuel(s) | Capacity (MW) | Technology |
|---|---|---|---|---|
| Unit 1 | shelved | coal: unknown | 225 | unknown |
| Unit 2 | shelved | coal: unknown | 225 | unknown |
Table 3: Unit-level ownership and operator details
| Unit name | Owner | Parent |
|---|---|---|
| Unit 1 | African Energy Ltd [100%][1] | Power Africa Pty Ltd [12.6%]; Alasdair Campbell Cooke [7.3%]; PS Consulting Pty Ltd [7.3%] |
| Unit 2 | African Energy Ltd [100%][1] | Power Africa Pty Ltd [12.6%]; Alasdair Campbell Cooke [7.3%]; PS Consulting Pty Ltd [7.3%] |
Project-level coal details
- Coal source(s): Sese mine
Background
According to project developer African Energy (February 2014), the Sese Integrated Power Project was initially designed as a 300 MW power station (2 x 150 MW coal-fired boilers) with a captive 1.5 million tonnes per annum (Mtpa) coal mine. The lifetime was projected to be 30 years.[2]
The Environmental Impact Assessment (EIA) was described as "well underway" in a 2013 company presentation, with a projected start date for the power station by 2019.[3]
The EIA for the power station and coal mine was approved in September 2014. The 300 MW power station was described as the first of multiple coal plants planned at the location.[4]
In June 2015, sponsor African Energy said it planned to double the capacity of the plant to 600 MW, and double the capacity of the associated mine to 2.5 million tonnes per annum. African Energy said Canada's First Quantum Minerals (FQM) would fully fund the project, at an estimated cost of US$1.5 billion. FQM would take about half of the power to its Zambia copper mine operations, with the rest supplied to other markets.[5]
In April 2017, in a move intended to encourage private sector investment, the government of Botswana announced that it had granted First Quantum Minerals and African Energy Resources a tax holiday to build the project. The report described the project as 450 MW in size. According to press reports, the project would receive a five-year tax break beginning with its first year of commercial operation and a preferential 15 percent company tax rate thereafter, compared to the normal corporate tax break of 22 percent. The tax break still required the approval of Parliament.[6] Plans for a phase II appeared shelved.
In February 2018, African Energy Resources said the approved 300 MW Environmental and Social Impact Assessment for the Sese Integrated Power Project was updated to include up to 500 MW of power generation and an increase in coal mining and airborne emissions. The updated Environmental Impact Assessment was set to be submitted to the Department of Environmental Affairs in the next quarter. The company said it planned to begin relocating residents in the project area.[7]
In August 2018, African Energy Resources reported its EIA for a 500 MW coal plant had been approved, and the company planned to build 2 x 225 MW units.[8] The company planned to export 100 MW (net) of the power from unit 1 to First Quantum Minerals in Zambia, leaving 88 MW net for sale to Botswana or export. The company was seeking financing from China for the project and "Initial engagements with Chinese SOEs have been positive".[9]
As of 2019, resettlement for the project was ongoing, and the PPAs were being negotiated. In addition to securing the PPAs, the main remaining commercial documents required for the project included Grid Connection, Transmission, and Use of System agreements with the power utilities in Botswana, Zimbabwe, and Zambia.[10][11][12]
On March 9, 2020, African Energy Resources (AER) announced the signing of a generation license with the Botswana Energy Regulatory Authority for the 300 MW coal plant. According to AER, the license marked the final regulatory approval required for the project, although financing and transmission infrastructure are yet to be secured.[13]
In June 2020, the Botswana Energy Regulatory Authority awarded a generation license to the project for 225 MW of coal power.[14]
According to a January 2021 quarterly activities report, Sese JV had secured: (1) A large-scale mining licence for 25-years (can be renewed) over an area of approximately 51 km2 which contains 650Mt of coal in resources; (2) A Development Approval Order under which the project qualifies for a 5-year tax holiday from the commencement of commercial operations followed by a 15% corporate tax rate; (3) Secured Land Rights and an associated 50-year Land Lease Agreement; (4) Water extraction rights from Shashe Dam, and an associated Water Supply Agreement; (5) Environmental approval for the project for up to 500 MW of power generation and the associated coal mining and coal processing volumes, and (6) Electricity Generation and Export Licence. It is unclear whether the licenses only apply to 225 MW are all proposed units. In addition, Sese JV had executed power sales agreements with Kalumbila Minerals Limited (Zambian subsidiary of FQM) and a Term Sheet with Zimasco (Pvt) Ltd, which together would consume the full output of the initial 300 MW power station for a period of 15 years. "Final commercial agreements are required for grid connection and use-of-system agreements in Botswana (negotiations underway), and use-of-system (wheeling) agreements with Zimbabwe and Zambia for power destined for those export markets."[15]
In April 2021 and July 2021, African Energy Resources' quarterly report noted "[b]usiness development activities for the Sese JV continued in China and southern Africa related to pursuing project development partners, EPC/OEM contractors and additional power offtake customers."[16][17]
Tender process
In October 2021, African Energy Resources' quarterly report noted that Sese JV was invited to participate in a tender process for a 300 MW power station by the Ministry of Minerals, Resources, Green Technology and Energy Security, Botswana. Key points of the tender included the following:[18]
- The tender was for the “Design, finance, construction, ownership, operation, maintenance and decommissioning at the end of a minimum 30-year economic life of a 300MW net greenfield coal fired power plant in Botswana as an independent power producer (IPP)”;
- The successful power station bid would sell power to Botswana Power Corporation via a 30-year Power Purchase Agreement;
- The Sese JV was one of only four parties shortlisted to participate in the tender process;
- The deadline for submissions was March 30, 2022.
The tender, first floated in 2013, reportedly represented the only government-backed fossil fuel procurement in the 20-year Integrated Resource Plan prepared by the Ministry of Mineral Resources, Green Technology and Energy Security. In addition to Sese JV, companies shortlisted for it were Minergy Coal, Jindal Africa, and Maatla, which all have coal mining licenses. However, only Minergy was reportedly already in production.[19]
Financing
In April 2014, it was reported that Saudi Arabia-based ACWA Power would be the lead developer and financier for the project.[20]
However, African Energy's 2017 Annual Report stated that Canada's First Quantum Minerals Ltd. (FQM) would fund the plant. FQM became a majority equity partner at the Sese Joint Venture in 2014 and invested AUD$13m for a 61% project interest and committed to invest a further AUD $5m to increase its stake to 75%. Power from Sese could be delivered to the Zambian Copperbelt where FQM operates a large copper mining and smelting business.[21][22]
As of January 2021, African Energy still owned 33.3% of the Sese Joint Venture (JV), which was developing the Sese Project. FQM owned the remaining 66.7% interest and was the manager.[15]
In 2018, African Energy Resources said the company was seeking financing from China for the project and "Initial engagements with Chinese SOEs have been positive".[9] FQM was hoping to make the project a candidate for evaluation under China’s Belt and Road Initiative.[23]
In January 2021, quarterly activities continued to report that Sese JV was engaged with prospective partners for financing and construction of the Sese Project and was progressing these negotiations. Negotiations to date had focussed on an initial installed capacity of 300 MW gross (2 x 150 MW units), which would produce approximately 260 MW of net power available for sale and which would satisfy the initial requirements under the Kalumbila Minerals Power Sales Agreement and the Zimasco Term Sheet, or the 300 MW IRP tender.[15]
Divested by way of an in-specie distribution
In October 2021, African Energy Resources' quarterly report noted the company’s interest in the Sese JV was transferred into African Energy Limited. The subsidiary was spun-out of African Energy Resources as a public unlisted company, with its shares distributed on a 1 for 1 basis to existing African Energy shareholders via an in-specie distribution. The move was completed in November 2021, meaning AFR is now "exclusively focussed on copper and copper-gold projects in Australia" and no longer reports on African coal projects.[18][24]
With the business climate increasingly unfavorable for investment in coal, African Energy Resources hived off its Botswanan coal assets from its Australian parent company, which is listed on the Australian Securities Exchange. They are now held by a non-listed company, away from the sight of conscientious investors.[25]
FQM backs out
In its January 2022 Climate Change report, FQM announced that "First Quantum does not intend to develop the Sese coal power project."[26] First Quantum Minerals' February 2023 Climate Change report did not appear to reference the Sese project.[27]
It was unclear whether African Energy Limited was also abandoning the project. The project was presumed shelved.
In a September 2023 letter to shareholders, African Energy Limited (AEL) announced that the joint venture with First Quantum Minerals had been terminated, and that AEL had 100% interest in the Sese project. AEL also stated that they were seeking new investors for the project: "AEL has commenced a process of engagement with parties who wish to develop new generation. A project data room has been established and multiple expressions of interest have been received. We expect this process to progress over the coming months with the intention of concluding a transaction that will see the introduction of a new investor to the Sese Project."[28]
Articles and Resources
References
- ↑ 1.0 1.1 (PDF) https://web.archive.org/web/20240125125549/https://africanenergyresources.com/wp-content/uploads/2023/09/2023-09-08-Letter-to-AEL-Shareholders.pdf. Archived from the original (PDF) on 25 January 2024.
{{cite web}}: Missing or empty|title=(help) - ↑ "Sese Integrated Power Project," African Energy Resources, accessed February 2014
- ↑ "Coal Export & Power Development Opportunities in Botswana," African Energy, September 2013
- ↑ "EIA approved for Sese," African Energy Resources, September 4, 2014
- ↑ "Sese power plant to cost P15bn," Mmegi, June 12, 2015
- ↑ "Botswana govt grants tax holiday for 450 Megawatt coal power project," Economic Times Energyworld, April 27, 2017
- ↑ "Development of AFR power station underway," Global Post, February 19, 2018
- ↑ "Sese EIA Approval Increased to 500MW," African Energy Resources, August 16, 2018
- ↑ 9.0 9.1 "Power Generation and Coal Export Project Developments," AGM Presentation, November 16, 2018
- ↑ "Quarterly Activities and Cashflow Report," African Energy Resources, January 31, 2019
- ↑ "2019 Annual Report," African Energy Resources, October 14, 2019
- ↑ "Sese Joint Venture Project," African Energy Resources, accessed February 2014
- ↑ "Botswana: Sese coal plant obtains generation licence," African Energy, March 10, 2020
- ↑ "Botswana grants first ever generation licenses to IPPs," ESI-Africa, June 22, 2020
- ↑ 15.0 15.1 15.2 "Quarterly Activities Report For The Period Ended 31 December 2020," African Energy, January 29, 2021
- ↑ "Quarterly Activities Report For The Period Ended March 31, 2021," African Energy, April 30, 2021
- ↑ "Quarterly Activities Report for the Period Ended 30 June 2021," African Energy, July 29, 2021
- ↑ 18.0 18.1 "Quarterly Activities Report for the Period Ended 30 September 2021," African Energy, October 29, 2021
- ↑ "Four-way race opens for 300MW contract," Mmegi, July 16, 2021
- ↑ "Regional update - Botswana: power plants and railways," World Coal, April 18, 2014
- ↑ "Annual Report," African Energy Resources, 2017
- ↑ "Developing Power Projects in Southern Africa," African Energy, London 121 Presentation, April 2016
- ↑ "2020 Annual Report," African Energy Resources, September 30, 2020
- ↑ "Completion of In Specie Distribution," Listcorp, Alma Metals Limited (ASX:ALM) news, November 8, 2021
- ↑ "African Energy Resources to remove its Botswanan coal business from Australian Securities Exchange," September 11, 2021
- ↑ "Climate Change Report," First Quantum Minerals Ltd., January 2022
- ↑ "Climate Change Report, February 2023," First Quantum Minerals Ltd., February 2023
- ↑ "Activities Report to Shareholders," African Energy Limited, September 8, 2023
Additional data
To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.
