Jindal Africa, the operator of the Mmamabula Energy Complex, has been named the preferred bidder to build a 300-megawatt coal-fired project which is expected to be the last fossil-fuel-powered electricity government will ever purchase.

In a recent announcement, the Minerals and Energy ministry confirmed that Jindal had beaten other shortlisted firms, who include Minergy Limited and Sese Power, to a contract which is conservatively estimated at more than $1 billion (P12.9 billion). Maatla Resources, which was also on the shortlist, pulled out of the tender earlier this year due to challenges in accessing funding.

Of the four shortlisted firms, Minergy was expected to be a nose ahead of the field as it already has a demonstrated coal mine in operation, while the other bidders had to prove both coal mining capacity and power station readiness. Bidders were due to be ranked primarily according to technical and financial capacity, as well as the experience of key project personnel.

“New entrants don’t have the experience and knowledge to operate in Botswana,” Minergy CEO, Morne Du Plessis told BusinessWeek earlier this year.

“We have been able to develop at our own pace but prospective bidders for the power plant will be under pressure to deliver and time to learn will not be available which can delay delivery.

“Minergy has been through the processes and is ready to execute on the award.”

Jindal Africa, with a presence in six regional countries, is part of the larger Indian group valued at about $18 billion. At a group level, Jindal is involved in coal mining, electricity generation, and related industrial production in several countries.

Jindal took over the Mmamabula Energy Complex from Canada’s CIC Energy in 2012 and has been advancing work on several projects intended for prospecting licences in eastern Botswana.

According to its website, Jindal Africa has 2.7 billion tonnes of estimated coal resources in eastern Botswana, with the quality being mostly suitable for thermal power generation.

The 300MW tender first floated in 2013, represents the only government-backed coal-fired electricity procurement in the 20-year Integrated Resource Plan (IRP) unveiled by the ministry in December 2020.

As the preferred bidder, Jindal will have to enter into negotiations towards a 30-year Power Purchase Agreement with the Botswana Power Corporation. Jindal Africa will then be expected to build, own, operate, and maintain the power plant, which will be supplied by its resources on the Mmamabula coalfields.

Analysts have said the pricing of the power coming out of the station will be determined by capital and operating costs, the profit markup charged by the developer and other factors.

Government has said it wants the 300MW power station operational by 2026, at which point the new plant will replace the 120MW Morupule A Power Station which is expected to reach the end of its lifespan by 2027.

Outside of the 300MW plant, government’s IRP leans towards the procurement of various renewable projects with a target to have at least 30% of the country’s electricity produced from these by the year 2030.