- Energy company African Energy Resources (AFR) has received an electricity generation licence from the Botswana government today
- The licence is the last regulatory box the company needed to tick before it could officially start building the Sese Power Station in Botswana
- Now, all that remains is for the company to find sufficient funding for the project
- According to African Energy, the power plant has piqued the interest of several major power consumers in Southern Africa
- African Energy owns the Sese Project in a joint venture with First Quantum Metals
- Shares in African Energy declined over 12 per cent today to close worth 2.1 cents each
Independent energy company African Energy Resources (AFR) has ticked the final regulatory box for its Sese Power Station in Botswana.
The Botswana Energy Regulatory Authority (BERA) gave the project the go-ahead today by approving African Energy’s application for an electricity generation licence.
The company is planning to build the 300-megawatt power plant with First Quantum Metals (FQM) as part of the Sese Joint Venture. With the joint venture locking in necessary mining licences, development approvals, lands rights, and environmental approvals since 2014, today’s Generation Licence was the final regulatory approval needed before the project could officially begin.
African Energy told shareholders today the approval has been received, though BERA will issue the licence documents and details of conditions at a later date.
With load-shedding — the temporary cutting-off of electricity from whole cities at a time to reduce the load on a generating plant — rampant throughout South Africa over the past year, African Energy said the Sese Project is piquing the interest of major power consumers throughout Southern Africa.
The company said potential debt and equity financiers are in the process of completing their due diligence on the project. Updates on negotiations with these parties will come in due course.
African Energy owns a third of the Sese Joint Venture after FQM earned the other two-thirds in 2014. Both companies contribute to the ongoing costs of the project based on their interest, but FQM arranges all debt financing.
According to African Energy, several technical studies relating to the Sese plant have been completed to work out costs and the financial model for the power project — meaning the companies are almost set to start building the power plant to serve the energy crisis throughout the Southern African region.
Thermal power plant failures in South Africa have joined forces with droughts and low river flows to cause the energy shortage. African Energy said interest is being driven to independent projects like Sese to keep countries and their economies operational.
Of course, on a day like today, it’s been tough for any ASX-listed energy company to see green in its share price. As oil prices drove the sector to four-year lows, African Energy couldn’t escape the sell-off.
Shares in the company fell 12.5 per cent today to close worth 2.1 cents each.