Menu

The government of Botswana has awarded a contract to a joint venture by Japan's Marubeni Corporation and South Korea's Posco Energy. The contract is for the expansion of the $800 million Morupule B power station, which lies about 280km north of Gaborone, the capital city of Botswana.

The coal-fired Morupule B power station is a 600MW extension of the 132MW Morupule A power station owned by Botswana Power Corporation (BPC).

The Morupule B power station was partly funded by the World Bank and built by the China National Electric Equipment Corporation (CNEEC) for $1.1 billion. However, the power station has failed to operate at full capacity because of persistent technical hitches, which CNEEC has been unable to fix since the launch of the power station in 2012.

According to Reuters, Botswana said the Japanese and South Korean companies would invest their funds to expand the Morupule B power station with an additional 300MW.

The firms will recoup their investment by selling the power to the BPC through a 30-year power purchase agreement at a cost of 812.56 pula per MegaWatt hour, Reuters reported.

The project is expected to be completed by May 2020, raising total power generation to over 1,000MW. Botswana’s national power demand currently stands at about 610MW.

The announcement on the contract comes days after Botwana’s Minister of Minerals, Energy and Water Resources, Kitso Mokalia, said investors have made enquiries about acquiring the troubled power station.

Last month Mokalia told parliament that the government was considering several options to fix the power station, including selling it to the CNEEC.

With the persistent hitches at Morupule B power station, Botswana, which has a population of about 2.02 million people, has been relying on 195MW from diesel generators as well as energy imports from South Africa.