Tlou Energy advances its Lesedi Gas-to-Power Project with the substation nearing completion and plans to commence power generation later this year, positioning itself to meet Botswana's growing energy needs.
- Lesedi substation over 90% complete, commissioning expected Q1 2025
- 100km transmission line construction finished, connecting to Botswana grid
- Gas production optimization underway to ensure stable power generation
- Power generation equipment discussions ongoing for phased installation
- Cash on hand approximately A$499k with A$3.1m in unused financing facilities
Steady Progress Towards First Power Sales
Tlou Energy Limited has reported significant advancements in its flagship Lesedi Gas-to-Power Project during the December 2024 quarter. The company is on track to initiate power generation later this year, marking a pivotal step for Botswana’s independent power sector. Central to this progress is the near completion of the Lesedi electrical substation, which is now over 90% finished and scheduled for commissioning in the first quarter of 2025.
The delivery and installation of a 5MVA step-up transformer at the substation represents a critical milestone, enabling up to 5MW of power generation initially. The substation’s design anticipates future expansion to support up to 25MW, aligning with Tlou’s strategic vision to scale operations as gas production capacity grows.
Infrastructure Connecting to Regional Power Markets
Complementing the substation progress, the construction of a 100-kilometre, 66kV transmission line is complete, with only minor finishing works remaining. This transmission line will link the Lesedi project to Botswana’s national grid and the Southern African Power Pool, granting Tlou access to a broad electricity market beyond Botswana’s borders. This connectivity is crucial for the company’s plans to sell power under an agreement with Botswana Power Corporation (BPC).
Optimising Gas Production for Stable Power Output
On the upstream side, Tlou continues to prioritise gas production optimisation. The company employs lateral drilling techniques to extract gas from coal reservoirs, currently operating two dual lateral production pods. Efforts during the quarter focused on dewatering the coal reservoir to improve gas flow rate consistency, addressing challenges such as coal fines that can block pumps and disrupt production.
These technical refinements are essential to ensure a stable and reliable gas supply to fuel the planned gas-fired power generators. Additional drilling is planned for the first half of 2025, contingent on securing further funding.
Phased Power Generation and Expansion Plans
Tlou is in active discussions with suppliers regarding the installation of gas-fired power generators, with proposals including 1,375 kW Cummins engines paired with GE generators. The installation will be phased, matching the ramp-up in gas production capacity. Initial power generation is expected to be around 10MW, with scope for rapid expansion given the strategic 40km2 site and existing infrastructure.
This staged approach allows Tlou to manage capital expenditure prudently while responding flexibly to market demand and operational realities.
Financial Position and Future Outlook
At the end of the quarter, Tlou held approximately A$499,000 in cash with an additional A$3.1 million in unused financing facilities. While this provides a runway for near-term activities, the company’s ability to execute its expansion plans will depend on securing further funding and power purchase agreements.
Beyond Lesedi, Tlou maintains exploration interests in the adjacent Mamba and Boomslang projects, which offer optionality for future growth once Lesedi reaches production.
Bottom Line?
As Tlou Energy approaches its first power sales milestone, the coming months will be critical to securing funding and scaling gas production to meet regional energy demand.
Questions in the middle?
- Will Tlou secure additional funding to support the planned drilling and power generation phases in 2025?
- How quickly can gas production be ramped up to support expansion beyond the initial 10MW power generation phase?
- What are the prospects for additional power purchase agreements beyond the current deal with Botswana Power Corporation?