In an update to stakeholders this week, Gilby admitted that while project finance discussions continue to progress, the process is taking longer than expected.
He explained a number of potential financiers would like to see the tender process come to a successful conclusion before committing funds to the project.
Once the tender process is complete, Gilby says the company expects to have additional funding options available.
In 2018, the Ministry of Mineral Resources Green Technology and Energy Security (MMGE) issued a Request for Proposal for the development of up to 100 Megawatts (MW) of Coalbed Methane (CBM) fueled power plants.
Tlou responded to the tender and was ultimately selected as the preferred choice with the Ministry given the go-ahead to negotiate with the company in respect of the tender.
“The company has now received a timetable from MMGE for Tender negotiation which will commence in January 2021,” disclosed Gilby, adding Tlou is looking forward to, “The advancement of this important milestone and successful conclusion ideally in the near term.”
Tlou has already signed agreements with Botswana Power Corporation (BPC) for a 2 MW Power Purchase Agreement (PPA) and grid connection.
Gilby told stakeholders that these agreements represent a significant milestone in the development of the Lesedi Power Project.
With tender negotiations ongoing, the company still finds itself in a precautious situation of securing funding.
However, the MD explained that not all companies require the tender to be completed, with some financiers looking at the potential upside once the project is connected to the grid.
Gilby said the company is aware that the length of time taken for funding discussions may concern some shareholders but stressed management is fully focused on getting the best deal for the company.