Botswana Oil Limited (BOL) are dreaming big with their Ikaegeng Coal to Liquids Project, an undertaking they hope will create 30, 000 temporary jobs.
Construction of the mine and production plant is not scheduled until mid 2025 and will take four years to complete.
Set to cost between US$ 3-4 billion, the project seeks to make the most of Botswana’s untapped coal reserves, estimated to sit at around estimated 212 billion tonnes.
The aim is to turn coal into liquids in order to generate fuel such as petrol and diesel, ultimately reducing the country’s reliance on imports. Added benefits include by-products such as tar, fertilizers and chemicals creating further revenue generation.
PLANNING BIG: Gamu Mpofu
Speaking to Voice Money, Project Manager, Gamu Mpofu said the venture will go a long way to improving Botswana’s energy security and independence.
“Since we have a lot of coal locally we decided to monetise it. As a landlocked country we don’t produce our own fuel so it means we import everything that we consume as a nation, therefore we are at a high risk of not having fuel supplies because we have no visibility of what is happening outside the borders,” explained Mpofu, noting the project is part of Botswana’s economic diversification efforts.
Giving an insight into the Public Private Partnership (PPP) they hope will be the driving force behind the project, he added, “It has been designed in such a way that the private party will take charge of much of the risks while us at BOL we provide off take of the project. So the private partner will design, build, finance, operate, maintain and transfer the project back to us after some years depending on the PPP term which will be agreed on. So by the time they are operating the facility, we will be buying fuel from them such that they are able to recover their costs and payback their lenders.”
Once operational, the plant is expected to produce 600 million litres of fuel per annum, which is exactly half the country’s current consumption rate (1.2 billion barrels).
“We have conducted a PPP feasibility study for the project and it has been approved by Ministry of Finance that indeed the project should continue in this model. We are now doing Request For Proposal (RFP) so that we procure private sector partner and soon we will release the RFP. Once we have procured partners they will come and do a bankable feasibility study bringing the project to financial close,” continued Mpofu.
The RFP is expected to be released by January 2023, while the financial close will take 12 months.
Emphasizing just how much is still to do, a site for the project is yet to be finalized.
WAITING: BOL storage facility
“We have investors who are locally based and have exploration licenses and those who have money and don’t have a local footprint, so we will engage whoever we procured about the location. So the location is not yet finalized but will be dependent on where we will get the coal and who will be supplying it,” Mpofu explained.
As well as the 30, 000 jobs construction of the project is expected to create, the facility will generate 1, 000 direct long term jobs and 3, 000 indirect long term jobs