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(Alliance News) - Tlou Energy Ltd on Tuesday announced a pilot power purchase agreement for the first two megawatts of power from the Lesedi Power project with Botswana Power Corp has been fully executed.
The Botswana and southern Africa focused exploration firm also said it has signed a grid connection agreement to enable a power injection into Botswana Power's grid. This will facilitate development of the power project and the sale of first power, it added.
Shares in Tlou were up 11% at 3.33 pence in London on Tuesday.
Tlou said negotiations on a larger power purchase agreement, of up to 100 megawatts coal bed methane fired power plants, with Botswana's Ministry of Mineral Resources Green Technology and Energy Security will begin in February, following the submission of Tlou's development plan.
It also said it has received confirmation from the ministry that it intends to fast-track the coal bed methane development, and that the ministry is "happy to provide the necessary support to ensure commercial development." Upon successful completion of the initial project, Tlou said it would look to expand.
"It is great to see that Botswana is open for business and the government is motivated to get the gas industry up and running. Tlou plans to start development of the Lesedi project as soon as possible and confirmation of the government's enthusiasm to provide the necessary support to ensure commercial development of coal bed methane is very well received. In addition, we have also recommenced negotiations with Botswana-based project financiers this month as we aim to close a deal for funding as soon as possible," said Managing Director Tony Gilby.
By Zoe Wickens; zoewickens@alliancenews.com
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