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Investors jostle for stake in Sese Power Project
BRIAN BENZA
STAFF WRITER

Over 10 international investors have expressed interest in snapping up a stake into African Energy's Sese Integrated Power Project through injections of funds.

 
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The Australian energy development company would use the funds to accelerate the ambitious coal and power export venture.
The project includes the building of an initial 1.5 million tonnes per annum (mtpa) mine to feed into an adjacent 300 MW power plant and a 2-mtpa-coal export enterprise through the Port of Maputo to Asia.
In a project update to shareholders released this week, the BSE listed company said discussions, which are expected to be complete during the first quarter of this year, are continuing with strategic project investors with the potential to take up non-sponsor project equity. To date, African Energy says 10 international investors have executed confidentiality agreements to gain access to the project's data with a further two expected before the end of this month.
"Non-binding term documents have been distributed to the potential investors and commercial discussions have commenced," the company said.
AFR has neither said how much it requires from investors nor the project costs, but the results of a bankable feasibility study, due before mid year, will give an indication of the funds required. On the power export project, AFR says discussions with a potential power off-taker within the SADC region are at an advanced stage and   the company will seek to raise the necessary   project finance upon successful conclusion of a draft Power Purchasing Agreement (PPA).
Discussions are also continuing with two potential power station operators for the operations and maintenance contract, the company said.  On the coal export front, AFR says a study to assess the rail and port infrastructure to and in Maputo is nearing completion.
"This study is evaluating the capital investment required to run a 2mtpa coal export operation in a sustainable manner on the existing railway, along with what staged investments would be necessary to increase the annual railway capacity to 10-20 mtpa and beyond. "The rail study is scheduled for completion in the current quarter," AFR said.
The port of Maputo has been identified as the preferred terminal with expansion plans proposed to increase capacity from the current 4.5 mtpa to 20 mtpa.
 Last November, a 34-wagon train carrying 1,600 tonne consignment from Sese Deposit and Morupule Coal Mine (MCM) arrived in the port of Mozambique as AFR and other stakeholders tested the route through Zimbabwe.
The coal export trial, the second of its kind this year, was conducted through a partnership involving African Energy, Morupule Coal Mine, logistics company, Grindrod Mozambique and international coal trader, Vital Coal South Africa. African Energy owns Sese Deposit in Botswana.
While African Energy is a near producer, Morupule Coal Mine is the country's only operating coal mine. Morupule already exports the commodity to regional countries such as Namibia and South Africa. Under its recently finalised expansion, Morupule increased its production from about one million tonnes of coal per annum to 3.2 million tones.