Tlou Energy Share Discussion Threads

[donkey40] 30/7/2020 08:03

Here come the chickens coming home to roost. Let’s see how the LSE lads explain away this morass of jumbled up waffle.

Sub-1p here we come.

[donkey40] 30/7/2020 00:41

If Botswana capital markets require that the private sector pays the cost of the Govt development agency due diligence costs, then truly that is at complete odds with the mature, ethical part of the world. And Bots will struggle to attract any serious FDI going forward.

So, in short, No I do not for 1 second expect Tlou to have to pay for BDC cost of due diligence.

So why are Tlou mgmt saying what they say ....?

The other recent change they made is adding engineering to the ‘detailed engineering and design’ of the 66kv transmission line. Whereas at launch of the fund raising it was just the detailed design of the 66kv line.

These aussie pirates are a tricky bunch !

[py494] 29/7/2020 22:15

"what costs (other than salaries for mgmt team) will be incurred whilst BDC conduct their due diligence ?"

Well, I may be reading this wrongly (I hope I am!) but does this mean Tlou are liable for the BDC's due diligence costs? (from the Entitlement Offer RNS):

"Once the term sheet is signed, due diligence covering commercial, technical, legal, reputational, environmental, social and governance can be completed. The costs of this will be borne by Tlou."

[donkey40] 29/7/2020 13:38

More compelling evidence that Tony, M/Miner and LSE loons don’t have a clue about life in sub-Saharan africa. Taken from a Moody’s recent report:

The outbreak will trigger a recession in Africa that could have long-lasting negative economic and social consequences

We have significantly reduced our growth forecasts for the African sovereigns that we rate in response to the coronavirus crisis (see Exhibit 1). Botswana (A2 negative), Namibia (Ba2 negative), South Africa (Ba1 negative) and Mauritius (Baa1 negative) face the sharpest declines in real GDP growth because the impact of domestic restrictions on economic activity and the impact of a fall in global demand on key sectors such as tourism and mining.

For almost all African sovereigns, the border closures and broader lockdown measures have significantly slowed small-scale trade across Africa, which is a crucial source of income and employment on the continent. With 86% of the population employed informally, the scope for government intervention to protect jobs1 and incomes is limited.

The fall in commodity prices and ……weak global growth is weakening demand for diamonds, with production cuts to support prices resulting in a significant slowdown in Botswana's diamond sector. A decline in international demand will also weigh on Namibia's mining-dependent economy.

Growth is set to resume later this year in concert with the rest of the world, with a further uptick in growth in 2021 as lockdowns ease. However, consistent with our expectations globally, the recovery will be slow. Moreover, there are risks that the economic crisis leaves a longer-lasting negative mark on Sub-Saharan Africa's economies than we currently assume. Low incomes and wealth, and shallow safety nets may deprive households of the capacity to absorb income shocks to a greater extent than we currently assess. Meanwhile, small banking systems may present an even greater constraint to the supply of credit that would support companies' cash flow. Overall, the pandemic raises the risk of deep and sustained financial distress that constrains growth for many years.

The significant downturn in economic activity is having sizeable consequences for the already limited amount of revenue African governments generate from their economies. At the same time, fiscal stimulus and other policy measures are increasing deficits, although the scale of these packages has been small given limited fiscal room for manoeuvre.

Some governments have increased capital expenditure, as a means to provide stimulus to keeping infrastructure and other construction projects running during lockdowns. While this will support growth and continue expanding the provision of much-needed infrastructure in Africa, it will widen fiscal deficits and increase fiscal pressures.We expect financial deficits will be widest in Mauritius, while South Africa, Zambia, Namibia, eSwatini, Botswana, and Egypt will also post significant deficits around 10% of nominal GDP.

The coronavirus shock has led to a financial squeeze in emerging markets and in particular frontier markets. The effects of this change in conditions are worsened by the need to borrow even more than usual to finance growing fiscal deficits. Among our rated African sovereigns, seven will witness a greater than 5pps increase in gross borrowing requirements: Mauritius (14.4pps), Namibia (9.1pps), Gabon (7pps), Botswana (6.4 pps), Mozambique (5.9 pps), Republic of the Congo (5.4 pps).

[donkey40] 29/7/2020 10:11

Interesting and subtle change in proposed use of funds raised:

Additional details: To fund detailed engineering and design of the proposed 66kV transmission line to connect the Lesedi project to the electricity grid; due diligence costs in relation to the provision of development funding for the Lesedi project; field operations; and general working capital.

Anyone care to hazard a guess at how much will be used to pay salaries? And whilst we are guessing, what costs (other than salaries for mgmt team) will be incurred whilst BDC conduct their due diligence ? Will this endless disingenuity in their messaging ever end...!

[donkey40] 27/7/2020 21:52

Finally, a half decent article getting to the crux of the problem with Botswana.

All the pathetic ramping attempts about Bots and endless little stuff up by Tidd and mates was always ignoring one aspect - what was holding Bots back from doing or achieving anything other that becoming increasingly beholden to and dependent upon the diamonds mining via the 50/50 Debswana JV (Govt of Bots and DeBeers/ Anglo).

There is an ever increasing list of corruption cases being publicly aired across Bots media channels - Sir Ian is hellbent on stirring up trouble at every opportunity ...... I wonder why that would be..

[donkey40] 27/7/2020 20:57

More compelling evidence why to buy / avoid Tlou - shock horror, everybody in the region has a compelling story to sell. Shame nobody can deliver much more than a fart in a paper bag burst of energy.

Infrastructure Office head Dr Kgosientso Ramokgopa reported on Monday that the publication of an initial list of 50 Strategic Integrated Projects and 12 Special Projects in the Government Gazette is motivated by a desire to ensure that the approval processes required to unlock infrastructure investments collectively valued at more than R360-billion were accelerated.
The Gazette notice was issued by Public Works and Infrastructure Minister Patricia De Lille on July 24 and includes 15 transport projects valued at R47-billion, 11 water and sanitation projects valued at R106-billion, 18 human settlements developments valued at R138-billion, two agricultural and agroprocessing projects valued at R7-billion, three energy projects valued at R58-billion and a digital infrastructure initiative valued at R4-billion.
Three projects from the Energy sector have been gazetted, its total investment value is R58billion and its potential for direct job creation is estimated at 6000. As an example, the emergency power Programme involves the development, installation, and operation of a total aggregate of up to 2 000 Megawatts new generation capacity in South Africa from independent power producers (“IPP”) projects.

Collectively, the projects could create more than 250 000 jobs.

None of the projects would be funded directly from the national fiscus, but all required either government guarantees, increased borrowing limits, or, as is the case for several of the human settlement projects, the deployment of bulk infrastructure to proceed.

Ramokgopa says it is not uncommon to find that a project is failing to make progress, owing to outstanding government approvals or licences. In many cases, projects were waiting 36 months for an environmental record of decision, while it was not uncommon for it to take 24 months and 18 months respectively to receive rezoning approvals or a water-use licence.

“Once we have Gazetted a project, it prescribes that the mandated authority complete the permitting and licensing decision within 56 days,” Ramokgopa explains, adding that this was in line with the terms of the Infrastructure Development Act, No 23 of 2014, as amended.

“Why do we want to go that route? We want to go that route, because we have come to admit that the economy needs to recover in the shortest possible time so we need to truncate the approval processes and get projects on to the ground.

[donkey40] 27/7/2020 17:02

LSE and usual suspects trying to generate some feel good - compelling case for Tlou with solar and Orapa.

Well if they can’t supply enough gas for 2mw, they won’t be able to supply sufficient quantity to a 90mw plant. And solar doesn’t work for Orapa either...

Massively entertaining that Orapa 90 Mw was compelling opportunity in the 2009 ASX listing prospectus. And again in AIM prospectus and bagged the hat-trick in the BSE prospectus.

Quarterly report has nothing to report other than they raised A$3.0m and now have 513m shares in issue. And are just as far away from the promised land as they have ever been - but of course they won’t say that.

[donkey40] 24/7/2020 23:08

The curse of P11 billion Morupule B plant

he government’s tactless behaviour when constructing the controversial and largely defunct multibillion Morupule B power plant cost burden, will now be carried by the citizens of Botswana who pay tax and electricity tariffs.

The Morupule B coal powered plant project cost government P11 billion and estimated to produce 600mega watts from its four units. The contentious plant was supposed to be complete by October 2012 but the defects rendered this impossible leading to cost overruns.

At the time of the tender award the cost was 7.4 billion but since the plant has been battling with frequent breakdowns, the cost ballooned by P4 billion.
The plant’s countless and repeated failures led to government moving swiftly to appoint a German company, STEAG Energy Services, to identify problems created by a Chinese company; China National Electric Equipment Corporation (CNEEC) which constructed the plant and rectify them.

However it appears that the problems are not yet solved as the plant is still currently experiencing faults time and again. It is understood that this created a burden for taxpayers which they were not supposed to have had the government been cautious when handling the construction of the mega project.

Notwithstanding the intention of the power plant was to position Botswana to be energy self-sufficient with a possibility of exporting some to neighbouring Southern African Development Cooperation (SADC) countries.

The parliamentary Public Accounts Committee (PAC) were shocked to learn this week that there is a direct relationship between the current high electricity costs and the ongoing problems at Morupule B.

“Yes, there is a relationship between the two,” Mmetla Masire, Permanent Secretary in the Ministry of Mineral Resources, Green Technology and Energy Security confirmed.

He explained that there is a relationship obviously because it is an operational cost and the tariffs are supposed to support the operation cost of the organisation.

“So if the organisation (BPC) is not effective and not efficient due to the carelessness by government in the Morupule B, then yes, they will trickle down towards the overall cost of operation that will then have to be supported through tariff structure, and the tariff will be justified,” he asserted.

Morupule B down again; three of the four units are malfunctioning

Masire also highlighted that they are still having some challenges with Morupule B as it is currently down, as it has largely been since construction. “Morupule B is not able to operate with all four units. Generally we are operating with one or one and half units or thereabout,” the PS pointed out.

According to Masire, Morupule A fortunately is operating properly since its overhaul. He continued: so we use generally about 600 megawatts and we import on a continuous bases 150 megawatts from South Africa, while adding that they have had challenges, as they are still importing 40% of Botswana’s power requirements.

“Imports are also a big factor as we can’t generate to the capacity we would have wanted as Morupule is malfunctioning,̶1; he pointed out.

BPC to increase electricity tariffs again next year

The Morupule B defects have led to Botswana Energy Regulatory Authority (BERA) taking steps to the process of the next tariffs increase by BPC. PS in the Ministry of Mineral Resources, Green Technology and Energy Security further confirmed that; “So yes there will be more tariffs.”

“The next increase is likely next year April (2021), that is next financial circle. BERA is running the process. They will ultimately determine a reasonable tariff for BPC. BPC has submitted their request,” he stated.

Masire’s justification is that the power utility is not charging at a cost reflective tariff, so over a period of time it will surely increase tariffs until it reaches a point where it is more cost reflective.

Meanwhile, he reasoned that the previous 22 percent tariff increase effected earlier in April was because it had to be in place for the financial year which started in that month and the increase has nothing to do with COVID-19 at the time.

Government abandons move to sell Morupule B plant

While it is clear that at some point, there was some discussion of possibly selling the plant, Masire revealed that the negotiations with potential investors were not successful and therefore “we couldn’t accede to their offer.”

“As far as I know we are not in discussion with anybody or selling or are we out in market seeking people to buy,” he said adding that “we have a detail program of how we are going to repair the plant at the cost of the contract to put it back to operation.”

Who led the country into the power chaos of giving CNEEC thumps up?

According to Masire, the evaluation team that was evaluating the tender had satisfied themselves that the Chinese company (CNEEC) had experience in terms of the work they have done elsewhere.

“But specifically to how many power plants they have built elsewhere I have to apologise I do not have the answers to those questions but I am aware they had built plants and the evaluation team was satisfied from a technical point.”

It is understood that even the Chinese Embassy in Botswana had actually raised red flags and expressed concerns that they did not trust that the company can do the works of such a magnitude as they lacked necessary experience to construct the power plant.

[cherrylady] 24/7/2020 22:50

Please explain how the f they can place an order before they have a design?
They know the start and finishing points , they have a high percentage of the agreements for pole positioning under control. They need to bag the remainder , order the sizes/types of pole and wire, and to settle on an appropriate amount and sources of electricity for this first phase.

And all those factors are mutually dependant upon each other. If the equipment needed is unavailable, the design will need to accomodate what is possible, for starters?


All irrelevant because a thinking man would realise I was responding to your
"Conveniently forgetting Whizzer’s points - they are going to have to drill more wells !!"

I did not forget at all .....

[donkey40] 24/7/2020 17:56

Bradley - the RNS said “to complete the detailed design.....”

Design is the relevant and operative word here. That does not extend to buying the materials and equipment necessary to ‘ConstructR17; the transmission line.

The money needed for construction will be raised in the next fund raise (if we are lucky). With 513m shares in issue and heaven knows how many warrants and options (although many of them may never be in the money so won’t be exercised), the next raise will likely take us over 600m ..... Dilution, dilution, dilution.

Brad, is the penny dropping yet? Bots is a basket case economy, and an increasingly hostile political battleground. Not really the boxes one normally ticks in choosing the ideal gas /CBM investment jurisdiction..

Oh, and just a thought - but much of the A$3.0m will be used paying salaries for the next 6-9 months ? Becoz, sure as sh1t, they won’t be connected to the grid by then...

[cherrylady] 24/7/2020 09:45

You are 100% donk!


"Then then have to clear the final sites for the poles , and requisition the labour, poles and wires , not to mention re-open #4 fully and decide what to do with #3 and #5 and #? for further expansion of Lesedi.

And you expect a week afte the placement to have been long enough to apply for the funding and get it approved?
Gee, they are not even allowed to fly into Botswana far less achieve all you expect of them!"

100% illiterate imho! That was in my 11:42 response - immediately after the two posts you revered from LSE! Another error that you will not recall when you claim to be 100% Mr Right! Heaven forbid!

[donkey40] 22/7/2020 23:54

What was it Tidd used to say about little or no corruption in Bots....

Directorate on Corruption and Economic Crime (DCEC) has recorded a whopping 47 cases of corruption in relation to COVID-19 tendering processes.

The cases comes at a time when the nation’s suspicions on corruption is escalating by the day as they are reeling from the socio-economic impacts of the coronavirus while few are pocketing from it.

When giving evidence before the parliamentary Public Accounts Committee (PAC), DCEC Director General Joseph Mathambo confirmed the nation’s sentiments on corruption by providing prove of corruption cases.
“So far we have received a total of 47 reports of corruption related to COVID-19. Out of the reports, 32 are from Gaborone region; 12 from Greater Francistown region and 3 in Maun region,” he stated.

He stressed that they have been receiving a lot of cases on COVID-19 and the reports are trickling in by the day, and hence they have allocated them and they are being tried for investigations.

“These cases were reported between lockdown period and now. These reports are from Ministries and Councils,” he emphasized. Mathambo further observed that the DCEC has not achieved any growth in the last 10 years while the prevalence of corruption continues to escalate as evidenced from the COVID-19 phase that we have been through.

“This has had a very bad effect on the economy of our country,” he stressed while adding that “the budget has been kept stagnant despite growing manifestations of corruption in the country.”

[donkey40] 21/7/2020 17:01

Be careful DarkH - you will be accused by the great and the good here (and LSE) of being yet another of my accounts. Just so I can talk to myself and have someone agree about all the negative stuff afflicting Tlou and StTony.

How about you surprise me with some comments about your views on Tlou rather than simply pointing out what we can all see for ourselves. Just a thought ...

PS - Brad, the Aussies know FA because there is FA about to happen.

[donkey40] 18/7/2020 23:43

Reconnaissance Energy (Africa) Ltd. I wonder if they /shale gas will be the final nail in the coffin for Tlou and for CBM in Botswana / sub-saharan africa?

[donkey40] 13/7/2020 15:40

So the Ministry of Minerals Resources, Green Technology and Energy Security is responsible for all that. The country cannot supply enough coal generated electricity from Morupule A and B. And they have to import 100% of petrol and diesel, mostly from SAfrica.

If that is the practical reality of electricity /fuel for an entire country for however many years now, it does beg questions as to why the situation has been perpetuated for so long ie who stood to profit from that arrangement. And maybe the answer to that question starts to play into why it is taking Bots Govt so long to reduce this excessive dependence.

That claim of former Pres looting P100 billion over many years maybe doesn’t look so fanciful. But if the corruption is connected to family members of both Bots and SA Governments, then we really are in for a long ride to identify and weed out the vested interests.

Given that will take a ridiculous length of time, maybe St Tony is right to develop a first small scale, plug and play model of gas to power generation.

There you go Brad - I paid your idol a compliment....

[donkey40] 12/7/2020 14:02

Brad - I know you like to be the centre of attention, but this time is Panini and me squaring off.

Panini - all about me and how much money I have lost. And how bitter and twisted I am. And telling me how to invest my money and who I should blame if it doesn’t work.

Absolutely amazing how you know so much about a total stranger ....

The message board is here to discuss Tlou - be really good if you could share your knowledge and insight on the company....

No need to worry about me but thanks for your concern (not).