Project Tsosoloso

Date: 22 October 2015

Gaborone, Botswana – Private energy company Coal Petroleum today announced that it had commenced with the development of a 20 000 bpd Coal-To-Liquids Co-generation and Fertiliser Project to be located in Francistown, North East District, Botswana. The project will be run over three phases until 2020 and is expected to deliver up to 304 MW power to the Botswana national grid. The intention is to ultimately scale the facility to a capacity of 50 000 bpd.

"The successful completion of this Project will provide a foundation for a national move towards energy security and supporting continued economic growth in Botswana," said Dr Brendon Hausberger from Holland & Hausberger, who are Coal Petroleum's Technical Advisors.

The project has been in preparation for over 18 months, during which the Baseline Technical and Economic Assessment of a Commercial Scale Coal-To-Liquid (CTL) Facility in Botswana was completed. This study has demonstrated a technically viable and lucrative business case.

The proposed project site in the Dumela Industrial Area has excellent infrastructure access; this includes power and water access to the site as well as road, rail, and housing facilities for the execution of the project and ongoing operations. Coal Petroleum has secured the key technology licences necessary for the project.

The Project will bring a total investment of over 4.2 billion USD to Botswana, and strongly aligns with the Botswanan National Imperatives of energy security and independence of supply combined with the efficient and environmentally conscious beneficiation of the local coal resources.

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Frequently Asked Questions

• Why this project?

  Botswana is currently wholly dependent on imports to meet local liquid fuel requirements and imports just under half the power supplied to consumers. A project of this nature will provide a secure and domestically owned supply of these critical energy products.

• Will we create jobs?

The project will create upwards of 4 000 permanent local jobs and more than 5 000 temporary jobs during the project build-up.

• What benefit is there for local communities?

Aside from the job creation, the project will provide a requirement for skilled human resources for the ongoing operation and Research and Development in the associated technology areas. The company strategy is to provide bursaries and funding to establish these expertise in Botswana. This will create the opportunity for developing highly marketable skills that will be of value to the local communities both now and in the future.

• What is the investment value?

The project total capital value is 4.2 billion USD.

• What is the benefit for Botswana?

  The project will offer Botswana a replacement for currently imported materials. The production cost of these will be almost entirely based on local economic impacts only. This allows Botswana the opportunity to support and boost its own economic growth, and will also have a positive impact of over 830 million USD per year on the Botswanan Balance of Trade.

  In addition the technology permits the provision of a peaking power solution to address Botswana's power needs in this regard.

• Who are the partners?

The project is owned and funded by Coal Petroleum (Pty) Ltd and Kumvest (Pty) Ltd, who are private and unlisted companies in Botswana and South Africa respectively. Technical partners supporting the project include Holland & Hausberger (Pty) Ltd and a number of specialist technology vendors in that role. The project is being executed through a Coal Petroleum Hong Kong subsidiary vehicle established for the purpose of execution of this project.

• Is government involved?

The Government has not expressed an interest in participation in the project beyond the offtake of products, although discussions are underway around a future government participation in the project. For a project of such obvious strategic importance, government participation would be of value to both the project and the government once the project was more advanced. In future, public participation may be possible though the listing of the company.

• Are similar other facilities planned?

After the successful completion of this project, it is the intention of Coal Petroleum to pursue other similar opportunities in the region.

• Is this the first plant of its type?

All of the elements of the project have been demonstrated successfully. The novelty of the project comes about from the integration of these components to arrive at the overall concept. This integration allows the facility to achieve significant environmental and economic benefits over competing standalone projects.

• What does this mean for neighbouring countries?

  The project will be able to provide fertiliser offtake to neighbouring states and discussions are underway in respect of offtake in this regard. With the later envisaged expansion stages of the project, these will be expanded to include the provision of fuel into the neighbouring countries.