A consortium formed by South Korea's POSCO Energy and Japan's Marubeni Corporation has been appointed as preferred bidder to construct and operate two plants in a Botswana power project.
The 300-megawatt Morupule B Phase II Project was awarded by the Botswana Ministry of Minerals, Energy and Water Resources through an international public tender.
The consortium entered a $800 million bid, with each company holding 50 percent of shares. The two companies are to jointly manage and maintain power plants 5 and 6 for the next 30 years. According to sources, the consortium will raise about $600 million in project financing from the Export-Import Bank of Korea, Japan Bank for International Cooperation and other financial institutions.
GS E&C will be in charge of construction, which will begin late next year on the two plants, which are expected to be completed and operational by May 2020.
Sources report that a POSCO Energy spokesman said:
“Given that European and Chinese companies have dominated the power plant construction market in Africa, it is meaningful for us to win the $800 million deal in Botswana. We will do our best to build a strong presence in Africa and use it as a stepping stone to become a global energy company.”
The consortium will design, finance, construct, own, operate and maintain a 2 x 150MW coal fired power plant to be built at the pithead of Morupule Coal Mine. The team will also enter into Power Purchase Agreements (PPA) with the Botswana Power Corporation outlining the tariff charge for power produced over the duration of the contract.
The team beat out competition from 11 other teams including Sumitomo Corporation, Korea Electric Power Corporation (KEPCO), ACWA Power and Aldwych International, among others.